Definition: US Treasury securities, also known as Treasuries, are debt obligations issued by the United States Department of the Treasury. When you buy Treasuries, you are financing the operation of the United States Federal Government. In different words, you are loaning money to the federal government, which in turn promises to pay you a specified amount of interest until the stated maturity date, at which time the original amount of the bond you purchased (the principal) is returned to you, the investor.
There are four types of Treasuries: 1) Treasury Bills (T-Bills), which mature in 1 year or less, 2) Treasury Notes (T-Notes), which mature in 2 to 10 years, 3) Treasury Bonds (T-Bonds), which mature in 20 to 30 years and 4) Treasury Inflation-Protected Securities (TIPS), which are inflation-indexed bonds.
Bond funds investing in Treasuries typically have the word "government" in the name of the fund. Many other bond mutual funds include significant amounts of US Treasuries, which are thought to be the "safest" bond types in the world.
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