Series 50: Treasury Notes And Bonds

Taken from our Series 50 Online Guide

Treasury Notes and Bonds

Treasury notes (T-notes) are coupon bonds that have a maturity ranging from 2 to 10 years. They are issued in purchase sizes of $100 to $5 million and pay interest semiannually. Treasury notes are non-callable, guaranteeing the holder the stated yield to maturity.

Treasury bonds are coupon securities having maturities from 10 to 30 years. They are issued in purchase sizes of $100 to $5 million and pay interest semiannually. Unlike Treasury notes, Treasury bonds may have a call feature. Prior to 1985, the Treasury issued bonds with a 5- or 10-year call feature, and while it has not done so since, it is not precluded from doing so in the future.

The 30-year bond is often called the “long bond” by traders because it has the longest maturity of government bonds. It serves as a benchmark of long-term financing in the U.S. and an indicator of the direction of interest rates.

SUMMARY

Basic Types of Treasury Securities

Type

Maturity

Purchase Size

Interest Paid

Quotes

Treasury bills

One year or less

$100 up to $5 million

None; price is discount to par

Yield

Treasury notes

Two to ten years

$100

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