Back to Glossary
Treasury Securities
Debt instruments issued by the U.S. government, considered among the safest investments.
Treasury Securities
U.S. Treasury securities are debt obligations of the U.S. federal government and serve as the benchmark for "risk-free" returns.
Types by maturity
- Treasury Bills (T-Bills): 4 weeks to 1 year. Sold at a discount, no coupon.
- Treasury Notes (T-Notes): 2 to 10 years. Pay semiannual coupons.
- Treasury Bonds (T-Bonds): 20 to 30 years. Pay semiannual coupons.
- TIPS: Treasury Inflation-Protected Securities. Principal adjusts with inflation.
- I Bonds: Savings bonds with inflation-adjusted interest rates.
Why they matter
- Considered the safest dollar-denominated asset
- Treasury yields serve as the benchmark for all other interest rates
- The yield curve (plotting yields across maturities) signals economic expectations
- An inverted yield curve (short rates above long rates) has historically preceded recessions
Tax treatment
- Exempt from state and local income tax
- Subject to federal income tax
- TIPS pay tax on inflation adjustments even before you receive them (phantom income)
Key Takeaways
- Context matters when interpreting any financial metric.
- Combine multiple data points for informed decisions.
- Continue learning to build investment knowledge.
Quick Reference
Category
Fixed Income
Difficulty
Beginner
Reading Time
1 min
Related Terms
Bond Yield
The return an investor earns on a bond, expressed as an annu...
Coupon Rate
The annual interest rate paid by a bond issuer on the bond's...
Duration
A measure of a bond's sensitivity to interest rate changes,...
Credit Rating
An assessment of the creditworthiness of a bond issuer, assi...
Municipal Bonds
Debt securities issued by state and local governments, often...
Learn More
Where You'll See This
This concept appears throughout stock detail pages and financial data.