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T-Bills , T-Notes, T-Bonds

T-Bills , T-Notes, T-Bonds. Treasury Bills  T-Bills. Mature in less than 1 Year// Period: 3 Month, 6 Month, 1 Year Minimum Investment Amount: $100 Issued by Federal Government

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T-Bills , T-Notes, T-Bonds

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  1. T-Bills , T-Notes, T-Bonds

  2. Treasury Bills  T-Bills • Mature in less than 1 Year// Period: 3 Month, 6 Month, 1 Year • Minimum Investment Amount: $100 • Issued by Federal Government • Mainly taken out by large investing organizations like banks and finance companies b/c backed by the government-Risk free Examples: You invest $980 into a T-Bill, After it matures receive $1000 Invest $970,000 & receive $1,000,000 after it Matures

  3. Treasury Notes  T-Notes

  4. Purpose Treasury notes help fund shortfalls in the federal budget, regulate the nation's money supply, and execute U.S. monetary policy.

  5. Example Example: A 5% 10-year note ($1,000 principal) is purchased 91 days after the last coupon payment. The current coupon period contains 182 days. A = 1000 x .05 (( 91 / 182 )/2) , solving A = $12.50

  6. Treasury Bonds  T-Bonds

  7. Examples/How it Works Certificates given by the U.S government Within a minimum of $1,000 to $5,000 Builds up in 10 years or more It increases semi annually

  8. Pros and Cons Cons If inflation occurs interest rates drop very low You first have to deposit more money. The start is $1,000. Pros • Safety • Usually higher interest rates than a regular savings account. • Easier to understand than a stock market

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