FEATURE — When it comes to investing your hard-earned cash, who can you trust?

U.S. Treasuries are the safest possible place to invest your money. Treasury bonds are issued and backed by the full faith and credit of the federal government. The advantage is safety; the disadvantage is that the yield you may earn can be lower than other investment options. The question to ask is simple, is the lesser yield still sufficient for your needs?

U.S. Treasuries are issued in four different categories: bills, notes, bonds and inflation-protection services.

Treasury Bills (T-Bills)

T-Bills have a maturity date of one year or less, and they are short-term by nature. Four options exist for a time duration of investment, four weeks, 13 weeks, 26 weeks and 52 weeks maturity. T-Bills do not pay interest.

Instead, they are sold at a discount and in denominations of $100. For example, a $1000 T-Bill with a maturity of 52 weeks might sell for $975. At the end of maturity (52 weeks), the owner of the T-Bill would receive $1,000.

Treasury Notes (T-Notes)

A T-Note has a more extended maturity time period than T-Bills, one to 10 years. Notes are issued in denominations of $1,000 with interest paid every six months. T-Notes are issued with the full face value of the note and not as a discounted face value.

Treasury Bonds (T-Bonds)

T-Bonds are issued for a more extended period than T-Notes, 10 years to 30 years to maturity. Bonds are issued at face value, and interest is paid every six months. The most popular time period is 30 years.

Treasury Inflation-Protected Securities (TIPS)

TIPS are U.S. Treasuries issued with an added benefit – they are designed to help offset inflation. TIPS are issued with five-, 10- and 30-year maturity dates. Interest is paid every six months and is a set rate, but additional interest can be paid at maturity based on inflation history.

Regardless of which U.S. Treasury you choose, the safety of the principal is always the underlying benefit.

Copyright © Lyle Boss, all rights reserved.