What are Treasury Securities?
Treasury securities are debt instruments issued by the government to raise capital. They are considered low-risk investments due to the government’s backing. The U.S. Department of the Treasury issues various types of treasury securities, including:
1. Treasury Bills (T-Bills): Short-term securities with maturities of one year or less. T-Bills are sold at a discount to their face value, and the difference represents the interest earned by the investor.
2. Treasury Notes (T-Notes): Intermediate-term securities with maturities ranging from two to ten years. T-Notes pay a fixed interest rate every six months.
3. Treasury Bonds (T-Bonds): Long-term securities with maturities exceeding ten years. T-Bonds also pay fixed interest every six months.
Treasury securities are considered safe-haven investments, and their yields are often used as benchmarks for other interest rates in the financial markets.