The US government is releasing debt securities to fund its operations. Issues of different types that offer different denominations, length and interest payments. They are all supported by United States government’s total faith and credits and are considered safe investments.
Basic concepts of government bonds
The United States government debt securities are issued by the Treasury Department. The values are technically bonuses, despite their different names. These are guaranteed by the federal government. Because these three types of bonds are virtually unlikely to default, investors are chosen based on the time they want to invest their money. The interest paid on government bonds of the US is not subject to state taxes and in some cases revenue from government bond taxes is deferred.
Bonds of Savings
Saving bonds are a type of government bonds. These are sold directly to the government public through its direct Treasury program. Savings Bonds issued in 2011 are EE and I. Series EE bonds earn a fixed rate of interest on bond life, while the Series earn a fixed rate plus an additional rate based on the rate of inflation. Savings bonds earn interest up to 30 years and can be restored after a minimum one year of participation.
Letters of wealth
Typical letters are commonly called T-Bills. These are short-term public money loans sold for periods of 4, 13, 26 or 52 weeks. They are sold at the auction at a discount on their face value, representing their interest. Hence the interests of fiscal measures are paid for redemption.
Treasury notes are government bonds with maturities of two, three, five, seven or 10 years. They have a fixed interest rate. It is paid every six months for the duration of the note. Notes can not be paid before they expire, but may be sold to other investors in the open market.
Bonds of wealth
Treasury bonds are the United States government debt for a longer period of time. They have 30 years and offer a fixed rate of interest. Interest is paid every six months. Bonds can not be paid in advance to the government, but can be sold to third parties.