US Treasury bonds are for when the United States Government is borrowing money from people. Considered to be the safest investment out there. There are a few benefits to this bond purchase – the greatest of all is that it’s tax exempt. You don’t pay any taxes on it’s gains.
The way these are purchased are usually in par value denominations ($1,000 bulk)
The company, government or municipality pays back in different time frames. This is called coupon rate or coupon yield.
Some can pay monthly, by-yearly, yearly or at the end of it’s maturity.
This information is known to the public when you purchase and you make the decision.
The risk is much lower, thus the rewards are lower. But if you buy well, you will always make your money back!
NOTE: There are minimums to when purchasing bonds. Each brokerage and financial institution has different policies. There usually aren’t any fees or commissions. Just find out about the minimum purchases and also the different time frames.
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