GC: n
S: Investop – https://www.investopedia.com/ask/answers/033115/what-are-differences-between-treasury-bond-and-treasury-note-and-treasury-bill-tbill.asp (last access: 1 December 2024); Fidelity – https://www.fidelity.com/learning-center/smart-money/treasury-bills-vs-bonds (last access: 2 December 2024).
N: 1. – treasury (n). c. 1300, tresourie, “room or house where treasure is laid up; building or vault in which wealth, precious stones, etc., are stored and kept safe,” from Old French tresorie “treasury” (11c.), from tresor (see treasure (n.); for second element see -y (1)).
The meaning “department of state that controls public revenue” is recorded from late 14c. Specifically by 1706 as “place where public revenues are deposited and kept and where the funds to pay expenses of government are disbursed.” Treasury bill is attested by 1797.
An Old English word for “room for treasure” was maðm-hus and for “treasury,” feo-hus (for first element, see fee (n.)); Middle English also had treasure-house (tresour-hous, mid-13c.).
- Treasury (Capital T).
a: a governmental department in charge of finances and especially the collection, management, and expenditure of public revenues.b: the building in which the business of such a governmental department is transacted. -
Treasury plural also Treasurys: a government security (such as a note or bill) issued by the Treasury.
– bond (n): early 13c., “anything that binds, fastens, or confines,” a phonetic variant of band (n.1) and at first interchangeable with it. For vowel change, see long (adj.); also influenced by unrelated Old English bonda “householder,” literally “dweller” (see bond (adj.)).
It preserves more distinctly than band the connection with bind and bound (adj.1) and is now the main or only form in the sense of “restraining or uniting force.”
From early 14c. as “an agreement or covenant;” from late 14c. as “a binding or uniting power or influence.” The legalistic sense of “an instrument binding one to pay a sum to another” is recorded by 1590s. The meaning “a method of laying bricks in courses” is from 1670s. In chemistry, of atoms, by 1900.
2. What is a Treasury bond?
Treasury bonds—also called T-bonds—are long-term debt obligations that mature in terms of 20 or 30 years. They’re essentially the opposite of T-bills as they’re the longest-term and typically the highest-yielding among T-bills, T-bonds, and Treasury notes. “Typically” because this isn’t always the case. When there’s an inverted yield curve, yields on Treasuries with shorter maturities can be higher than on those with longer maturities.
With T-bonds, your interest rate is fixed for the bond’s entire term. However, your actual yield might be higher than its interest rate if you purchase the bond at less than par, or face, value on the secondary market.
T-bonds pay interest every 6 months until you sell the bond or it matures, at which point you’ll receive the bond’s face value. It’s possible to sell a T-bond before maturity, but you could lose money as there’s no guarantee you can sell it for face value.
Note that Treasury bonds aren’t the same as US savings bonds, which include EE bonds, I bonds, and HH bonds (no longer issued after 2004; with a 20-year life, they mature in 2024).
| A quick look at Treasury bonds | |||||
| Maturities available | When interest is paid | How interest is taxed | Liquidity | Volatility | Typical returns compared to Treasury bills and notes |
|---|---|---|---|---|---|
| 20 or 30 years | Every 6 months | Income exempt from state and local taxation; federal tax due each year on interest earned. | High | Medium-High | Higher |
3. Investment; Loans: treasury bond (United States).
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Long-term (more than ten years) fixed coupon paper issued by the Federal Reserve on behalf of the U.S. Treasury.
4. Investment; Stock Exchange: U.S. Treasury bond, U.S. T-bond.
- U.S. Treasury bonds (U.S. T-bonds) are very long-term bonds … Because the full faith and credit of the federal government “backs” them, they are considered the safest of investments.
- U.S. Treasury Bonds are exempt from state and local taxes. These securities have the longest maturity of any bond issued by the U.S. Treasury, from 10 to 30 years … Denominations range from $1000 to $1 million. U.S. Treasury Bonds pay interest every 6 months at a fixed coupon rate. These bonds are not callable, but some older U.S. Treasury Bonds available on the secondary market are callable within five years of the maturity date.
5. Treasury bonds offer the longest commitment, taking 20 or 30 years to mature.
Treasury bills (T-bills) are short-term investments that mature in one year or less.
Treasury notes have maturities ranging from two to 10 years.
S: 1. Etymonline – https://www.etymonline.com/search?q=Treasury+bond (last access: 1 December 2024); MW – https://www.merriam-webster.com/dictionary/treasury (last access: 1 December 2024). 2. Fidelity – https://www.fidelity.com/learning-center/smart-money/treasury-bills-vs-bonds (last access: 1 December 2024). 3 & 4. TERMIUM PLUS – https://www.btb.termiumplus.gc.ca/tpv2alpha/alpha-eng.html?lang=eng&i=1&srchtxt=Treasury+bond&index=alt&codom2nd_wet=1#resultrecs (last access: 1 December 2024). 5. Investop – https://www.investopedia.com/ask/answers/033115/what-are-differences-between-treasury-bond-and-treasury-note-and-treasury-bill-tbill.asp (last access: 1 December 2024).
SYN: T-bond
S: Fidelity – https://www.fidelity.com/learning-center/smart-money/treasury-bills-vs-bonds (last access: 1 December 2024)
CR: Treasury bill, Treasury note.
