Treasury Bill , also in short, T-bill. are sold in terms ranging from a few days to 52 weeks. Bills are sold at a discount from their face value. For instance, you might pay $990 for a $1,000 bill. When the bill matures, you would be paid $1,000. The difference between the purchase price and face value is interest.
Treasury Note takes two to ten years to attain maturity. Every 6 months, the investor gets the coupon payments or interest payments. The investor gets the interest payments for 2, 5, or 10 years of maturity date.
Treasury Bond represents the longest maturity of all other treasury securities. This bond has a maturity period of usually 30 years. Similar to Treasury note, this bond also offers coupon or investment payments after every 6 months. The treasury department has discontinued the direct issuance of this bond, from the year 2001. Now, this kind of investment bond has become obsolete. However, this bond is widely traded in the secondary market. Hence, it is possible to continue using it until the maturity of last Treasury bond being issued.
Treasury Inflation Protected Security is termed as TIPS. This bond is unique and differs from all other kinds of investment securities. This investment bond offers the adjustment of principal value of the security for inflation until the maturity date. The adjustment amount goes with the Consumer Price Index. Due to which, the coupon or interest payment on TIPS differ the adjusted amount. This is to protect the investor against the demeaning effects of inflation levied on the principal amount of the investment.
The American government also issues Patriot and STRIPS (Separate Trading of Registered Interest and Principal Securities) bonds.The maturity period of Patriot and STRIPS Treasury bonds, falls between 1 to 30 years after the issuance date. These Treasury bonds have a similar structure to that of a T-bill, but the principal parts and the interests on security are distinct. These treasury bonds maintain their inflation with principal balance or interest rate, adjusting the Nation's economy.
The American government also issues I Saving Bond and EE Saving Bond .
