Treasury Note

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.

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Treasury Note

A debt security backed by the full faith and credit of the United States government with a maturity between one and 10 years. They may be purchased directly from the government or from a bank; they have coupon payments payable every six months. Treasury notes may be bought competitively or non-competitively. In a non-competitive transaction, one takes the interest rate he/she is given on a T-bill. In competitive investing, one bids on a desired yield; however, this does not mean it will be accepted. Treasury notes are low-risk, low-return investments. The minimum purchase is $1,000 and the maximum is $1 million in competitive bidding, or $5 million in non-competitive. They are known informally as T notes. See also: Treasury bill, Treasury bond.

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Treasury note. Like US Treasury bills, Treasury notes are debt securities issued by the US government and backed by its full faith and credit.

They are available at issue through Treasury Direct in denominations of $1,000 and are traded in the secondary market after issue.

Notes are intermediate-term securities, with a maturity dates of two, three, five or ten years. The interest you earn on Treasury notes is exempt from state and local, but not federal, taxes.

And while the rate at which the interest is paid is generally less than on long-term corporate bonds, the shorter term means less inflation risk.

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Treasury Note

What Does Treasury Note Mean?

A marketable U.S. government bond with a fixed interest rate and a maturity generally between 1 and 10 years. Treasury notes are sold directly from the U.S. government or through a bank. When buying Treasury notes from the government, an investor can put in a competitive or a noncompetitive bid. With a competitive bid, the investor specifies the yield he or she wants; however, this does not mean that the bid will be approved. With a noncompetitive bid, the investor accepts whatever yield is determined at the auction.

Investopedia explains Treasury Note

Treasury notes are extremely popular not only because they are backed by the full faith and credit of the U.S. government but also because there is a large secondary market for the notes; this makes them highly liquid. Interest payments on the notes are made every six months until maturity. The income from the interest payments is not taxable on a municipal or state level but is federally taxed.

Related Terms:
• Debt
• Interest Rate
• Treasury Bill
• Treasury Bond
• U.S. Treasury