US Treasury Bonds vs. US Treasury Notes
US Treasury bonds are a type of bonds, which has a maturity period from 10 years up to 30 years. As their name implies, they are issued by the US Treasury and are guaranteed by the US government. They come in denominations from $1,000 up to $1 million. However, they are no longer issued. So, if you want to purchase some you should try finding them on the secondary market.
You will receive the interest you have gained from your treasury every six months. Most of the times, they are not directly purchased from the US Treasury, but instead through the services of a qualified financial institution or broker.
US Treasury notes have a maturity period of 2, 3, 5 or 10 years. They come in denominations of $1,000.
While US treasuries are offered through qualified financial institutions or brokers, treasury notes are directly offered by the US Treasury at auctions. The latter are held at periodic basis and investors can place either a competitive or a non-competitive bid. The first guarantees you that you will win the note, whereas the latter does not.
During the auction the interest rate of the Note is set. Under the rules of a competitive bid, if you are the person that has offered the pre-determined interest rate you will get the Note.
On the other hand, under the rules of a non-competitive auction you agree to accept the interest rate that has been determined. This is the provision that assures you the purchase of the Note.
| Rate this article : Low | High |
- Bond Definition and Concepts
- 30-Year Long US Treasury Bond
- Municipal Bonds Tax Dilemmas
- Zero Coupon Bonds Basics
- Zero Coupon Bonds Tax Implications
- Bond Ladder Basics
- Convertible Bonds Basics
- US Treasury I Bonds Basics
- Bond Prices and Bonds-Interest Rates Relationship
- Real Rate of Return on Investment Calculations
- Stocks and Inflation Rate
- Investing in Both Stocks and Bonds
- Bond Tax Rules
- Types of Bonds
- Bond Default Risk
- Preferred Stocks Disadvantages
- Stock Value Focus
- Government Deficit and Stock Investors
- Investing in REITs - Advantages and Disadvantages
- Large Cap Stock Characteristics
- Small Cap Stocks Characteristics
- Foreign Stock Characteristics
- Technology Stock Characteristics
- Introduction to Microcap Stocks
- Convertible Securities: Convertible Bonds Explained
- Bond Funds Safety
- The T+3 Cycle Rule in Securities Trading
- A Guide to Investing in Bond Funds
- Callable Bonds
- Earnings Reports and Their Importance
- Mega Cap Stocks in Your Investment Portfolio