✅ Compare The Best Bank Accounts on Our Website:

———————————————-
Compare Banking

💻 Best Checking Accounts:
💻 Best High Yield Savings Account:
💻 Best Online Banks:
💻 Best Savings Accounts:

—————————————————————–

✏️ Corporate Bonds Basics: How Do They Work?
✏️ Stocks Vs Bonds: Which Investment Is Better?
✏️ CDs vs Saving Accounts:
✏️ What Are The Different Types Of Mutual Funds?

————————————————————————————————————–

Compare Brokers

📈 Best Online Brokers for Stock Trading:
📈 Best Investing Robo-Advisors:
📈 Best Online Brokers For Beginners:

————————————————————————————————————–

🙏 Follow us 🙏

Subscribe to our YouTube Channel:
Our Website:
Twitter:
Facebook:

————————————————————————————————————–
Timeline:

00:00 Intro
00:12 What are U.S. Treasury Securities?
00:49 U.S. Treasury Securities: How Does It Work?
02:28 Understanding Bond Characteristics
04:10 Bond Yield: Example
04:47 The Main Types Of U.S. Treasury Securities (1)
07:21 U.S. Savings Bonds -Example
09:33 Treasury Inflation – Protected Securities (TIPS) – Example
10:44 The Main Types Of U.S. Treasury Securities (2)
13:29 How Can You Buy U.S. Treasury Securities?

————————————————————————————————————–
Advertiser Disclosure: Some of the links and other products that appear on this website are from companies which The Smart Investor will earn an affiliate commission or referral bonus.
This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all companies or all available offers. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This compensation allows us to maintain a full-time, unbiased editorial staff. Our opinions are our own….(read more)

LEARN MORE ABOUT: Treasury Inflation Protected Securities

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

U.S. Treasury securities are considered one of the safest investments in the world, as they are backed by the full faith and credit of the U.S. government. They are debt obligations issued by the U.S. Department of the Treasury to finance the national debt and fund the operations of the government. In this article, we will discuss how U.S. Treasury securities work, the various types of securities available, and the pros and cons of investing in them.

How Do U.S. Treasury Securities Work?

When you invest in a U.S. Treasury security, you are essentially loaning money to the government. In exchange, the government promises to pay you back the principal, or face value, of the security at maturity, along with any interest that has accrued. Treasury securities are issued with various maturities, ranging from a few days to 30 years. The longer the maturity, the higher the interest rate typically is.

Types of U.S. Treasury Securities

There are several types of U.S. Treasury securities available to investors:

1. Treasury bills (T-bills): These are short-term securities with a maturity of 52 weeks or less. They are sold at a discount to their face value and do not pay interest. Instead, the investor receives the face value of the security at maturity.

2. Treasury notes (T-notes): These are intermediate-term securities with maturities ranging from 1 to 10 years. They pay interest every six months and are sold at face value.

3. Treasury bonds (T-bonds): These are long-term securities with maturities ranging from 10 to 30 years. They pay interest every six months and are sold at face value.

4. Treasury inflation-protected securities (TIPS): These are securities that protect investors from inflation by adjusting the principal value of the security based on changes in the Consumer Price Index (CPI).

5. Floating-rate notes (FRNs): These are securities that have variable interest rates that change based on a benchmark rate.

Pros and Cons of Investing in U.S. Treasury Securities

Pros:

1. Safety: U.S. Treasury securities are considered one of the safest investments in the world, as they are backed by the full faith and credit of the U.S. government.

2. Liquidity: U.S. Treasury securities are highly liquid and can be easily bought and sold in the secondary market.

3. Diversification: U.S. Treasury securities can provide diversification to a portfolio, as they have a low correlation with other asset classes such as stocks and corporate bonds.

Cons:

1. Low yields: U.S. Treasury securities typically have lower yields compared to other fixed-income securities such as corporate bonds.

2. Inflation risk: U.S. Treasury securities are not immune to inflation risk, as inflation can erode the real value of the returns over time.

3. Interest rate risk: U.S. Treasury securities are also exposed to interest rate risk, as rising interest rates can lower the value of the securities in the secondary market.

Conclusion

U.S. Treasury securities can be a valuable addition to a diversified investment portfolio, providing safety, liquidity, and diversification. However, investors should also be aware of the potential drawbacks of investing in these securities, such as lower yields, inflation risk, and interest rate risk. It is important to consider your investment objectives, risk tolerance, and time horizon before investing in U.S. Treasury securities.