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 ?
Trotting along behind her, close to her heels, was quite the most forlorn specimen of the cat tribe she had ever beheld.
`It's a Cheshire cat,' said the Duchess, `and that's why.
Priaulx, Alexander.' 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.
Swiftly and silently he glided through the forest in the wake of the savage cat, nor was the pursuer, for all his noble birth, one whit less savage than the wild, fierce thing he stalked.
Not long after this another great longing came over the Cat. She said to the Mouse, 'You must again be kind enough to look after the house alone, for I have been asked a second time to stand godmother, and as this child has a white ring round its neck, I cannot refuse.'
You will always be the same size--and the same saucy, inconsiderate Glass Cat, with pink brains and a hard ruby heart."
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.
If th' young gentlemen had been at home, I should a' thought they'd been setting their dogs at her, an' worried her, poor thing, as they did MANY a poor thing's cat; but I haven't that to be feared on now.' Nancy's eyes were better, but still far from well: she had been trying to make a Sunday shirt for her son, but told me she could only bear to do a little bit at it now and then, so that it progressed but slowly, though the poor lad wanted it sadly.
"I have only one," said the Cat; "but I can generally manage with that." Just at that moment they heard the cry of a pack of hounds coming towards them, and the Cat immediately scampered up a tree and hid herself in the boughs.