T-Bills , T-Notes, T-Bonds

Treasury Bills  T-Bills Mature in less than 1 Year// Period: 3 Month, 6 Month, 1 Year Minimum Investment Amount: $100 Issued by Federal Government Mainly taken out by large investing organizations like banks and finance companies b/c backed by the government-Risk free Examples: You invest $980 into a T-Bill, After it matures receive $1000 Invest $970,000 & receive $1,000,000 after it Matures

Treasury Notes  T-Notes

Purpose Treasury notes help fund shortfalls in the federal budget, regulate the nation's money supply, and execute U.S. monetary policy.

Example Example: A 5% 10-year note ($1,000 principal) is purchased 91 days after the last coupon payment. The current coupon period contains 182 days. A = 1000 x .05 (( 91 / 182 )/2) , solving A = $12.50

Treasury Bonds  T-Bonds

Examples/How it Works Certificates given by the U.S government Within a minimum of $1,000 to $5,000 Builds up in 10 years or more It increases semi annually

Pros and Cons Pros Cons Safety Usually higher interest rates than a regular savings account. Easier to understand than a stock market If inflation occurs interest rates drop very low You first have to deposit more money. The start is $1,000.