# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Treasuries

Written By
Paul Tracy
Updated December 1, 2020

What are Treasuries?

Treasuries refer to all the tradable and negotiable debt obligations issued by a country's government. Broadly speaking, when an investor is referring to "Treasuries," he or she is referring to U.S. Treasuries.

How Do Treasuries Work?

U.S. Treasuries can be divided into three main categories: Treasury bills (T-bills), Treasury notes (T-notes) and Treasury bonds (T-bonds) which are designated according to their lengths of maturity.

Treasury bills are short-term, zero-coupon bonds that are issued in maturities with lengths of 4, 13 or 26 weeks. Treasury notes are intermediate-term bonds issued by a federal government with maturities of 2, 3, 5 or 10 years.  Treasury bonds are long-term, semi-annual coupon bonds issued by a federal government. Their maturities range from 10 to 30 years.
 
U.S. Treasuries are considered the safest investments in the world because the U.S. government has never defaulted on any debt it has issued. For this reason, Treasuries serve as a benchmark for the risk-free rate of return when determining the amount of expected risk for other types of assets.

Why Do Treasuries Matter?

Treasuries are savings vehicles for governments, corporations, banks and individuals around the world. They are also an important instrument in monetary policy, because the sale and repurchase of them allows central banks to control the money supply and thus make adjustments to a nation's economy.

Treasuries are some of the world's safest investments, and therefore, have lower yields than more risky investments. They are appropriate for the most risk-averse investors who are mainly interested in preserving capital or having a steady stream of income. The rating of a nation's treasuries by credit rating agencies is an essential indicator of the financial stability of that nation.

Ask an Expert about Treasuries
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Treasuries.
Be the first to ask a question

If you have a question about Treasuries, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Treasuries, then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Treasuries

By submitting this form you agree with our Privacy Policy

Share
close
Don't Know a Financial Term?
Search our library of 4,000+ terms