Treasury Bond
Definition
A long-term debt security issued by the U.S. government with a maturity of 20 or 30 years, considered one of the safest investments available.
Treasury bonds (T-bonds) are long-term government debt securities issued by the U.S. Department of the Treasury with maturities of 20 or 30 years. They pay interest every six months and return the face value at maturity. Because they are backed by the full faith and credit of the U.S. government, they are considered virtually risk-free.
Treasury securities come in various maturities: T-bills (up to 1 year), T-notes (2-10 years), and T-bonds (20-30 years). TIPS (Treasury Inflation-Protected Securities) adjust their principal based on inflation, providing an additional layer of protection.
Treasury bonds serve multiple roles in a portfolio: they provide steady income, act as a safe haven during market turmoil, and can appreciate in value when interest rates fall. The 10-year Treasury yield is a key benchmark used to set mortgage rates and assess economic outlook.
Related Calculators
Related Terms
Bond
financeA fixed-income debt instrument where an investor loans money to a borrower (typically a corporation or government) for a defined period at a fixed interest rate.
Yield
financeThe income return on an investment, usually expressed as an annual percentage based on the investment's cost or current market value.
Interest Rate
financeThe percentage charged by a lender on borrowed money or paid to a saver on deposited funds, expressed as an annual percentage.
Inflation
financeThe rate at which the general level of prices for goods and services rises over time, eroding the purchasing power of money.
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