U.S. Government Securities

U.S Government Securities

Treasuries are considered the safest of all debt instruments, and the interest paid out by Treasury bonds is generally exempt from state and local income taxes (but not federal taxes). Treasury bonds come in the following forms:

  • Treasury Bill
    • $1,000 minimum purchase
    • Maturity dates from 90 days to 1 year
    • Purchased at a discount
  • Treasury Note
    • $1,000 minimum purchase
    • Maturity dates from 2 to 10 years
    • $5,000 minimum purchase for notes with 2 or 3 years maturity
  • Treasury Bond
    • $1,000 minimum purchase
    • Maturity dates from 10 to 30 years
    • Pays out highest interest
  • Zero-Coupon Bond
    • Purchased at a steep discount
    • Pays out compounded interest at maturity–not at regular intervals
    • Owner owes taxes on credited interest
  • Savings Bond
    • Pays no interest
    • Comes in different series (e.g. EE, HH)
    • Can be purchased in small amounts
    • Nontransferable and not traded
    • New Series I guarantees your return will outpace inflation