Treasury note

Treasury Note

A marketable, U.S. government debt security with a fixed interest rate and a maturity between one and 10 years. T-notes can be bought either directly from the U.S. government or through a bank.

When buying from the government you can either put in a competitive or noncompetitive bid. With a competitive bid you specify the yield you want; however, this does not mean your bid will be approved. With a noncompetitive bid is one where you accept whatever yield is determined at auction.

Notes:

T-notes are extremely popular investments as there is a large secondary market that adds to their liquidity. Interest payments on the notes are made every six months until maturity. The income for interest payments are not taxable on a municipal or state level but are federally taxed.

See also: Government Security, Maturity, Off-the-run Treasuries, On-the-run Treasuries, Secondary Market, Treasury Bill, Treasury Bond

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Treasury note

Intermediate-term (1-10 years), interest-bearing debt of the U.S. Treasury that may be purchased through a bank or brokerage firm or directly from the Federal Reserve. An active secondary market makes it easy to resell a Treasury note.