What is a treasury bond?
A treasury bond is a debt security issued by the government, with a maturity of 30 years. It is also commonly called T-bond.
How do treasury bonds work?
Treasury bonds pay a fixed rate of interest. When you buy a treasury bond, you get the interest or coupon every six months, and get back the principal or the face value of the bond at maturity. Treasury bonds are marketable securities, which means they can be sold to someone else before their maturity date.
Why should I buy treasury bonds – what are their advantages?
The biggest advantage of t-bonds is that the interest you receive is exempt from state and local taxes, although it is taxed by the federal government. Treasury bonds are also virtually risk-free, since they are issued by the US government.
Are there any disadvantages of treasury bonds?
Since they are considered virtually risk-free, the rate of interest offered by t-bonds is lower than other fixed income investments.
How can I buy treasury bonds?
Anyone can buy treasury bonds through a bank or broker, or directly from the government through the website TreasuryDirect.gov
Podcast: What is a Treasury Bond or a T-Bond
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
All you need to know about Treasury Bonds or T-Bonds: What is a treasury bond, How do treasury bonds work, Why should you buy treasury bonds – what are their advantages, Are there any disadvantages of treasury bonds, How can you buy treasury bonds, and more.
Show notes and transcript at: https://www.easypeasyfinance.com/what-is-a-treasury-bond-or-a-t-bond/