Treasury Bond
A long-term US government debt security with a maturity of 10 to 30 years.
Definition
Treasury bonds (T-bonds) are long-term debt securities issued by the US Department of the Treasury with maturities ranging from 10 to 30 years. They pay semi-annual interest (coupon payments) and return the face value at maturity. T-bonds are considered among the safest investments in the world because they are backed by the full faith and credit of the US government. The 10-year Treasury yield serves as a benchmark for mortgage rates and other long-term interest rates. Treasury securities also include T-bills (under 1 year), T-notes (2-10 years), and TIPS (inflation-protected). Investors often flock to Treasuries during market uncertainty as a safe haven.
Related Terms
Bond
A fixed-income debt instrument where an investor loans money to an entity for a defined period at a fixed interest rate.
InvestingYield
The income return on an investment, expressed as a percentage of the investment's cost or current value.
EconomyFederal Funds Rate
The interest rate at which banks lend reserves to each other overnight, set by the Federal Reserve.
EconomyInflation
The rate at which the general level of prices for goods and services rises, eroding purchasing power.