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Individual Bonds: U.S. Treasury

Treasuries are debt obligations issued and backed by the full faith and credit of the U.S. government. Because they are considered to have low credit or default risk, they generally offer lower yields relative to other bonds.

Reasons to consider Treasury bonds

Find U.S. Treasury bonds

Find Bonds

Newly issued Treasuries can be purchased at auctions held by the government, while previously issued bonds can be purchased on the secondary market. Both types of orders can be placed through Fidelity.*

Treasury Minimum denomination Sold at Maturity Interest payments
U.S. Treasury bills $1,000 Discount 4-, 13-, 26-, and 52-week Interest and principal paid at maturity
U.S. Treasury notes $1,000 Coupon 2-, 3-, 5-, 7-, and 10-year Interest paid semi-annually, principal at maturity
U.S. Treasury bonds $1,000 Coupon 30-year Interest paid semi-annually, principal at maturity
Treasury inflation-protected securities (TIPS) $1,000 Coupon 5-, 10-, and 30-year Interest paid semi-annually, principal redeemed at the greater of their inflation-adjusted principal amount or the original principal amount
U.S. Treasury zero-coupon bonds $1,000 Discount > 10 years Interest and principal paid at maturity
Treasury STRIPS $1,000 Discount 6 months to 30 years Interest and principal paid at maturity
* As of November 1, 2012

Structure: Coupon or no coupon/discount

Investors in Treasury notes (which have shorter-term maturities, from 1 to 10 years) and Treasury bonds (which have maturities of up to 30 years) receive interest payments, known as coupons, on their investment. The coupon rate is fixed at the time of issuance and is paid every six months.

Other Treasury securities, such as Treasury bills (which have maturities of one year or less) or zero-coupon bonds, do not pay a regular coupon. Instead, they are sold at a discount to their face (or par) value; investors receive the full face value at maturity. These securities are known as Original Issue Discount (OID) bonds, since the difference between the discounted price at issuance and the face value at maturity represents the total interest paid in one lump sum.

Next steps

Find U.S. Treasury bonds. Choose from 40,000 new issue and secondary market bonds & CDs, and approximately 60,000 total offerings with our Depth of Book.

Learn about fixed income alerts. Get updates on Treasury auctions and new issues sent to your wireless device or Fidelity.com inbox.

Sign up for alerts.

Learn about the Fidelity Auto Roll Program. Have your U.S. Treasury and CD investments automatically reinvested at maturity.
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yield

the percentage of return an investor receives based on the amount invested or on the current market value of holdings; it is expressed as an annual percentage rate; yield stated is the yield to worst — the yield if the worst possible bond repayment takes place, reflecting the lower of the yield to maturity or the yield to call based on the previous close

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credit quality

a criteria used to evaluate the creditworthiness, or risk of default, of an individual fixed-income security; generally expressed through ratings provided by one of the credit ratings agencies

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auction

a security distribution system in which the price is set, based on auction bids, at the lowest level that will raise the requisite funds

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secondary market

a market where securities are bought and sold between investors, as opposed to investors purchasing securities directly from the issuers; secondary market activity generally takes place on a major exchange, such as the New York Stock Exchange, or on electronic communications networks (ECNs)

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discount

the amount below the stated 'face' or par value when a fixed-income security (e.g. a bond) is bought or sold; for example, if a bond's face value is $1,000 and it sells for $900, it was sold at a discount

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Standard & Poor's (S&P) Corporation

an independent company that provides investors with market intelligence in the form of credit ratings, indices, investment research and risk evaluations and solutions

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interest

the amount paid by a borrower to a creditor, or bondholder, as compensation for the use of borrowed money

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face value

the stated value of an investment at maturity; the face value for a corporate bond is typically $1,000; also known as par value or par amount

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maturity, maturity date(s)

the date on which the principal amount of a fixed income security is scheduled to become due and payable, typically along with any final coupon payment. It is also a list of the maturity dates on which individual bonds issued as part of a new issue municipal bond offering will mature

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Original Issue Discount (OID)

the difference between the stated redemption price at maturity (if greater than one year) and the issue price of a fixed-income security attributable to the selected tax year

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offer

a proposal to sell securities at a specified price

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bid

a proposal to purchase securities at a specified price

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zero-coupon bond

a bond where no periodic interest payments are made; the investor purchases the bond at a discounted price and receives one payment at maturity that usually includes interest; they have higher price volatility than coupon bonds as a result of interest rate changes

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default

occurs when a bond issuer fails to make either an interest payment or principal repayment on its bonds as they come due, or fails to meet some other provision of the bond indenture

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credit risk

the risk that the issuer of a fixed-income security may not be able to make regularly scheduled interest payments or repay the principal at maturity

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interest rate

the annual rate, expressed as a percentage of principal, payable for use of borrowed money

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Treasury inflation protected securities (TIPS)

a type of Treasury note that adjusts for inflation by providing inflation compensation in addition to the stated coupon the inflation component affecting the bond's principal is calculated based on the Consumer Price Index (CPI), adjusting it upwards for inflation or downwards for deflation

Questions?

Fidelity Learning Center

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties.
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