CATS


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CATS

Certificate of Accrual on Treasury Securities

A formerly-issued Treasury security whose coupons had been stripped by an intermediary. CATS therefore paid no interest. They were sold at a significant discount from par and matured at par. CATS fluctuated in price, sometimes dramatically, because changes in interest rates made them more or less desirable. CATS could be invested IRAs and other pension accounts; they were also exempt from state and local taxes. They were issued between 1982 and 1986, becoming obsolete when the U.S. Treasury began issuing its own stripped bonds. See also: Zero-Coupon Bonds.

Certificate of Accrual on Treasury Securities (CATS).

CATS are US Treasury zero-coupon bonds that are sold at deep discount to par, or face value. Like other zeros, the interest isn't actually paid during the bond's term but accumulates so that you receive face value at maturity.

You can use CATS in your long-term portfolio to provide money for college tuition or retirement. For example, you may purchase them in a tax-deferred IRA or a tax-free Roth IRA or Coverdell education savings account (ESA).

As with other zeros, CATS prices can be volatile, so you risk losing some of your principal if you sell before maturity. And like other federal government issues, the interest is free of state and local income tax but subject to federal income tax.

References in classic literature ?
How can four unprotected females get rid of a cat who won't be got rid of?
It's a Cheshire cat,' said the Duchess, `and that's why.
Conceive my emotions, monsieur, when this fat, beastly cat is placed before me upon my desk!
At the opening notes of the melody--a slow, wailing, dirgelike air--the cats rose, and circled round their mistress, marching to the tune.
I'd like to think cats have a chance for heaven, but I can't.
The great cat lay crouched upon a thick limb, hidden from the ape's view by dense foliage, waiting patiently until the anthropoid should come within range of his spring.
The kind Mouse agreed, but the Cat slunk under the town wall to the church, and ate up half of the pot of fat.
No one can regret more than I the fact that you made me," asserted the cat, crouching upon the floor and slowly swaying its spun-glass tail from side to side.
Cocky had darted to the side, but, even as he darted, and as the cat landed on the sill, the cat's paw flashed out sidewise and Cocky leaped straight up, beating the air with his wings so little used to flying.
At the cheerful tinkle of the gold, the Fox unconsciously held out his paw that was supposed to be lame, and the Cat opened wide his two eyes till they looked like live coals, but he closed them again so quickly that Pinocchio did not notice.
The donkey laid himself down upon a heap of straw in the yard, the dog stretched himself upon a mat behind the door, the cat rolled herself up on the hearth before the warm ashes, and the cock perched upon a beam on the top of the house; and, as they were all rather tired with their journey, they soon fell asleep.
Weston's coat, carefully wiped the rain from his hat, and gave the cat its supper, busily talking all the time: now thanking her clerical friend for what he had done; now wondering how the cat had found out the warren; and now lamenting the probable consequences of such a discovery.