Treasury Investments - T bills, Treasury notes, Treasury bonds and US savings bonds

Summary: Summary of the various types of treasury investments - the T bill, treasury note, treasury bond and U.S. saving bond.

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Treasury investments, or securities, are bonds issued by the Department of Treasury. In basic concept, they are the many different forms of loans that the people of the U.S. give to the government. There are four types of treasury securities:

1. Treasury bills: these are securities that have a length of maturity that is less than one year (13, 26 or 52 weeks). Therefore, they are offered in a discounted form. Instead of offering interest along with the repayment amount, purchasers are offered more money at the time of maturity than they paid for the bill to begin with.
2. Treasury notes: This kind of security has a longer maturity date of 2, 5, or ten years, and they are sold in $1,000 increments.
3. Treasury bonds: With a long maturity date of 10-30 years, these securities can be helpful for investors who need to build a long-term strategy. Treasury bonds in paper form can be converted to electronic form.
4. Savings bonds: These securities differ from others in that they are registered to one person only and therefore cannot be actively traded. Also, they are the most affordable kind of treasury investment, as investors can purchase them for as low as $25.

Except for savings bonds, each of these is traded extensively on the market and can be easily converted to cash. They are backed by the Federal government and are usually considered low or no-risk investments. The interest on these "loans" is not taxable on the local or state level.

In addition to these kinds of treasury investments or securities, the government also sells Patriot bonds, and STRIPS (Separate Trading of Registered Interest and Principal Securities) which have the structure of a t-bill and mature between 1-30 years after issuance. They are also the stripped version of TIPS. As zero coupon bonds, they do not pay interest payments. I Bonds and TIPS (Treasury Inflation-Protected Securities) round out the selection of Treasury Investments. These bonds are purported to keep up with inflation, with the interest rate or principal balance adjusting with the nation's economy.