Cash investments or securities are bonds issued by the Treasury Department. Basic concepts, which are the different forms of loans that the American people gives the government. There are four types of Treasury securities:
1. Treasury bills or treasury bills: These are values ??that have a maturity of less than one year (13, 26 or 52 weeks). Therefore, it is offered as a discount. Instead of offering interest, along with the amount of payment, buyers are offered more money at the time of the maturity of what you paid for the bill to begin with.
2. Treasury notes: This type of security has a maturity date longer than 2, 5 or ten years, and sold in increments of $ 1,000.
3. Treasury Bonds: With a long maturity period of 10-30 years, these values ??may be useful for investors who need to build a long-term strategy. Treasury bonds in paper form can be converted to electronic format.
4. Savings bonds: These values ??differ from others in that are registered for a single person and therefore can not be actively traded. They are the cheapest class of treasury investments as investors can buy for as little as $ 25.
What are the types not-so-popular cash investments?
Besides this type of investment or Treasury securities, the government sells bonds and strips Patriot (Separate Trading of Registered Interest and Principal of Securities). These investments separate interest and principal parts of security, since they have the structure of a mature T-bill and 10-30 years after issuance.
They are also stripped version of TIPS (Treasury Inflation-Protected Securities). Since zero-coupon bonds pay no interest payments. I Bonds and TIPS complete range of cash investments. These bonds were intended to keep pace with inflation, interest rate or principal balance adjustment of the economy 's.
What are the advantages of investing in Treasury securities?
With the exception of savings bonds, each of these is widely marketed in the market and can be easily converted into cash. They are backed by the federal government and investments are generally considered low or no risk. The interest of these "credits" is not subject to tax at the local or state level.
These values ??are recorded. This simply means that when it comes to buying, the name they are registered to is the sole owner. Therefore, if lost they can be easily replaced if misplaced.
How can anyone invest in savings bonds?
In the past, savings bonds were issued on paper. Since October 2002, the U.S. Treasury was of high technology and began offering an online TreasuryDirect. Therefore, these purchases can be made online at your convenience.
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