There are three main types of bonds:

• Corporate bonds are debt securities issued by private and public corporations.
• Investment-grade.
• High-yield.
• Municipal bonds, called “munis,” are debt securities issued by states, cities, counties and other government entities.

Treasuries come in three varities:

• Treasury Bills. Short-term securities that are non-interest bearing (zero-coupon) with maturities of only a few days (these are referred to as cash management bills), four weeks, 13 weeks, 26 weeks or 52 weeks.
• Treasury Notes.
• Treasury Bonds.

A government bond is a form of security sold by the government. It is called a fixed income security because it earns a fixed amount of interest every year for the duration of the bond. The purpose of a government bond is to raise money to operate the government and to pay down debt.

Treasury bonds (T-bonds) are fixed-rate U.S. government debt securities with a maturity range between 10 and 30 years. Along with Treasury bills, Treasury notes, and Treasury Inflation-Protected Securities (TIPS), Treasury bonds are one of four virtually risk-free government-issued securities.

Characteristics of bonds

• Face value. Corporate bonds normally have a par value of $1,000, but this amount can be much greater for government bonds.
• Interest.
• Coupon or interest rate.
• Maturity.
• Issuers.
• Rating agencies.
• Tools and tips.

Treasury bills are zero-coupon bonds, i.e. no interest is paid on them to investors. They are issued at a discount and redeemed at face value. Therefore, the returns earned by investors in T-bills remains fixed throughout the bond tenure irrespective of the economic condition of the country.

A Treasury bond (T-Bond) is a marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. T-bills are short-term obligations issued with a term of one year or less, and because they are sold at a discount from face value, they do not pay interest before maturity.

Government (sovereign) bonds such as those issued by the U.S. Treasury. Bonds (T-bonds) issued by the Treasury with a year or less to maturity are called “Bills”; bonds issued with 1 to 10 years to maturity are called “notes”; and bonds issued with more than 10 years to maturity are called “bonds”.

These three types of bonds share many common characteristics, but also have some key differences. The categories and key features of treasury securities include: T-Bills – These have the shortest range of maturities of all government bonds.

Treasury Bonds Long-term, fixed-principal securities issued with a 30-year maturity. Outstanding fixed-principal bonds have terms from 10 to 30 years. Interest is paid on a semiannual basis with the principal paid when the bond matures.

Introduction to Treasury Securities 1 Basic Characteristics of Treasury Securities. Treasury securities are divided into three categories according to their lengths of maturities. 2 Auction Purchase of Treasury Securities. 3 Risk and Reward of Treasury Securities. 4 Tax Treatment of Treasury Securities. 5 The Bottom Line.