Bonds.com, Inc. through our trading platform, BondStation.com,
is pleased to offer access to U.S. government bills, notes, bonds and TIPS.
Product Overview:
United States Treasury securities, also known as Treasuries, are in the forms of interest-bearing, as
well as discounted, security instruments issued by the U.S. Treasury. These securities comprise the
largest portion of the fixed income securities market and normally provide the greatest amount of
liquidity. As a result of the liquidity of U.S. Treasury securities, pricing and trading of these
securities are normally more efficient than with respect to other fixed income securities. Treasuries
appeal to a wide range of U.S. investors, including banks, insurance companies, pension plans, and
individuals and also have broad appeal to non-U.S. citizens and entities as well.
Treasury securities are backed by the “full faith and credit” of the U.S. government, they are
generally considered to be free of credit risk and typically carry lower yields than other securities.
The rates on Treasury securities have traditionally been used as the benchmark for interest rates
throughout the U.S. economy and international capital markets.
Issuance:
In the primary market, U.S. Treasury securities are issued through regularly scheduled auctions.
The Federal Reserve Banks serve as conduits for the auctions, with the Federal Reserve Bank of New
York coordinating much of the auction activity. Individuals, corporations and financial institutions
may participate in the auctions. Participation in Treasury auctions, however, is typically concentrated
among a small number of dealer firms, known as primary dealers.
Source: Department of the Treasury
Features and Benefits:
- Credit Quality – U.S. government, Treasury debt obligations are backed by the "full faith and credit" of the government, and thus by its ability to raise tax revenues and print currency, U.S. Treasury securities are considered the safest of all investments. They are viewed in the market as having no "credit risk"
- Yields – Due to the lack of default risk, Treasury securities typically offer lower rates than most other securities
- Tax Exemption - Treasury securities interest payments are exempt from state and local income taxes (but not federal taxes). Investors should always consult a tax professional regarding their individual tax situation
- Liquidity/Marketability - Another important characteristic of the Treasury market is its high level of liquidity, which means that Treasuries are easy to buy and sell. Because they trade so frequently in large volume, the spreads between what one dealer would be willing to pay and what another dealer would be willing to sell for is lower than for other securities
Risks:
- Treasury securities are subject to: Interest rate, and call risk
Taxes: For full information regarding the tax consequences of Treasuries, investors should consult their tax advisor.
For more information please access our affiliate site BondClass.com, or call one of our Relationship Managers at 1-888-266-3708.
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