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US Government Securities

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US Government Securities

The US government issues its own securities from the US Treasury and several government agencies. US government securities are very popular with investors worldwide. They offer fixed interest rates and have durations comparable to corporate bonds. These securities are considered by many to be the safest of all because of the creditworthiness of the US government.

Learn more about the risks of US government securities.

Things To Know

  • Government securities exist in two broad forms: marketable and non-marketable.

Notes and bills

The Treasury also issues Treasury notes and Treasury bills. It sells its securities at regular auctions or from banks or brokerage firms. The income these securities earn is subject to federal taxes, but not state taxes.

How they are quoted

Government bonds are quoted on $100 even though their face value (par) may be $1,000. Fractions are given in 32nds. The fraction appears after the decimal point in the quotation. For example, a bond quoted at 88.8 would have a price of $882.50 ($880 + 8/32 of $10).

The two forms they take

Government securities exist in two broad forms. Marketable securities can be traded on the secondary market or over the counter. The non-marketable securities can be redeemed only back to the government.