Definition
Treasury bonds (T-bonds) are U.S. government debt securities with maturities of 20 to 30 years. They pay semi-annual interest and are backed by the full faith and credit of the U.S. government, making them among the safest investments. T-bond yields serve as benchmarks for other interest rates.
Example
A 30-year Treasury bond with a 4% coupon pays $40 per year per $1,000 face value, with principal returned after 30 years.
FAQ
What is Treasury Bond?
A long-term debt security issued by the U.S. government.
Why is Treasury Bond important?
Treasury Bond helps investors evaluate fixed income and make more informed decisions.
Related Terms
Treasury Note
A medium-term U.S. government debt security with 2-10 year maturity.
Treasury Bill
A short-term U.S. government security maturing in one year or less.
Risk-Free Rate
The theoretical return of an investment with zero risk.
Yield Curve
A graph showing interest rates of bonds with equal credit quality but different maturity dates.