Treasury securities can be purchased directly from the US Treasury using a service named “TreasuryDirect.” The minimum purchase for any Treasury security that can be obtained via the TreasuryDirect program is $1,000. There are no fees for accounts below $100,000; accounts in excess of that sum are charged a $25 annual fee. Interest payments can
Treasury securities are IOUs for money the U.S. government borrows both domestically and internationally. The four different types of marketable U.S. Treasury securities are Treasury bills, Treasury bonds, Treasury notes, and Treasury Inflation Protected Securities (TIPS). T-Bills vs T-Notes vs T-Bonds vs – What’s the Difference?Contents The main difference between each security is the maturity
A ‘tranche’ (derived from the French for ‘slice’) is used in finance to define part of an asset that is divided (sliced, hence the term) into smaller pieces. A common example is a mortgage-backed security. One bank may only be interested in the payments at the longer end of the security’s maturity, while another investment
Relationship Between Bond Price and Bond Interest Rate The basic relationship between the price of a bond and prevailing market interest rates is an inverse relationship. This is actually pretty straightforward. For example, if you have a 6% bond (this means that it pays $60 annually per $1000 of face value) and interest rates jump
These definitions of municipal bond terminology are at best simplifications. They should only be used as a stepping stone, leading to further education about municipal bonds. Act of 1911 and 1915 Used for developments within a particular district and are secured by special assessment taxes set at a fixed dollar amount for the life of
Moody’s Bond Ratings are intended to characterize the risk of holding a bond. These ratings, or risk assessments, in part determine the interest that an issuer must pay to attract purchasers to the bonds. The ratings are expressed as a series of letters and digits. How are Bonds Rated?Contents Here is a list of bond
This article provides a brief introduction to the duration measure for bonds. The duration measure for bonds is a invention that allows bonds of different maturities and coupon rates to be compared directly. Everyone knows that the maturity of a bond is the amount of time left until it matures. Most people also know that
How to Amortize a BondContents The IRS requires investors who purchase certain bonds at a premium (i.e., above par, which means above face value) to amortize that premium over the life of the bond. The reason is fairly straightforward. If you bought a bond at 101 and were redeemed at 100, that sounds like a
What Are Bonds?Contents A bond is just an organization’s IOU; i.e., a promise to repay a sum of money at a certain interest rate and over a certain period of time. In other words, a bond is a debt instrument. Other common terms for these debt instruments are notes and debentures. Most bonds pay a
Finding the best investing books can be difficult because there are so many different resources for investors with varying levels of experience. Beginner investors need different types of books and information than more advanced and professor investors. That’s just how it is. That’s why I wrote this article. Each level of investors should focus on