US Treasury Bonds - Fidelity

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US Treasury Bonds

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

Find US Treasury bonds

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. ratings agency, reflecting increasing concerns about the U.S. budget deficit and its future trajectory. Tax advantages
income from Treasury bonds is exempt from state and local income taxes, but is subject to federal income taxes. Other components of your return, however, may be taxable when the bonds are sold or mature. If you buy a bond for less than on the secondary market (known as a market discount) and you either hold it until or sell it at a profit, that gain will be subject to federal and state taxes. Buying a bond at market discount is different than buying a bond at . When a bond is sold or matures, gains resulting from purchasing a bond at market discount are treated as capital gains while OID gains are treated as a type of income. Liquidity
Large volumes of Treasuries are bought and sold throughout the day by a wide range of institutions, foreign governments, and individual investors so they are considered to be highly liquid. Investors considering Treasury securities have opportunities to buy bonds both at regularly scheduled auctions (see Auction Schedule) and in the secondary market, which is one of the world's most actively traded markets. Investors can find Treasury bills, notes, and bonds posted with active and . Spreads (the difference in price between the bid and offer) are among the most narrow available in the bond market. Investors should, however, be aware that at certain times, such as when important economic data is released, Treasury securities can be at their most volatile. Choice
Treasuries come in maturities of 4 weeks to 30 years, with longer maturities usually offering higher coupons. Treasuries also come in various structures, like Treasuries with coupons, Treasuries, and Treasury inflation-protected securities (TIPS), whose principal and returns adjust to reflect changes in the consumer price index. or credit risk. Interest rate risk
Treasuries are susceptible to fluctuations in , with the degree of volatility increasing with the amount of time until maturity. As rates rise, prices will typically decline. Inflation risk
With relatively low yields, income produced by Treasuries may be lower than the rate of inflation. This does not apply to . Credit or default risk
Investors need to be aware that all bonds have the risk of default. Investors should monitor current events, as well as the ratio of national debt to gross domestic product, Treasury yields, credit ratings, and the weaknesses of the dollar for signs that default risk may be rising. of US Treasury Securities for the most current details. Issue Available maturities Auction frequency US Treasury bills 4-, 8- , 13-, 17-, 26-week Weekly US Treasury bills 52-week Every 4 weeks US Treasury notes 2-, 3-, 5-, 7-year Monthly US Treasury notes 10-year Original Issue: Feb, May, Aug, Nov; Reopened: other eight months US Treasury bonds 20-year
30-year Original Issue: Feb, May, Aug, Nov; Reopened: other eight months Treasury inflation-protected securities (TIPS) 5-, 10-, and 30-year 5-year TIPS – Original Issue: April; Reopened: August and December

10-year TIPS – Original Issue: January and July; Reopened: March, May, September, and November

30-year TIPS – Original Issue: February; Reopened: June and October US Treasury floating-rate notes (FRNs) 2-years Original Issue: Jan, April, July October; Reopened: other 8 months * As of June 27, 2022
All US Treasury auction orders placed online on Fidelity.com are free of charge. If you prefer to place your trade through a representative, a $19.95 service fee will be charged. The Treasury limits non-competitive auction purchases to $10 million per household for each security type and term. Fidelity reserves the right to adjust or cancel auction orders that violate the $10 million household limit.

Next steps

Choose from 75,000 new issue and secondary market bonds & CDs, and over 120,000 total offerings with our Depth of Book. Get updates on Treasury auctions and new issues sent to your wireless device or Fidelity.com inbox.

Have your US Treasury and CD investments automatically reinvested at maturity.

Questions

Gain a deeper understanding of fixed income and bonds. 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. 623697.5.0

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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

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

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

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)

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

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

interest

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

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

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

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

offer

a proposal to sell securities at a specified price

bid

a proposal to purchase securities at a specified price

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

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

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

interest rate

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

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