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Simple English definitions for legal terms
treasury bond
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A quick definition of treasury bond:
Term: Treasury Bond
Definition: A treasury bond is a type of investment that is issued by the U.S. government. When you buy a treasury bond, you are lending money to the government for a period of 20 or 30 years. Treasury bonds are considered to be very safe investments because they are backed by the government. However, because they are so safe, they don't pay very high interest rates. You will receive interest payments every six months and get your money back when the bond matures. You can buy treasury bonds at a government auction, through a bank, or on a resale market. Treasury bonds are different from treasury bills and treasury notes, which have different lengths of time and interest rates.
A more thorough explanation:
Definition: A Treasury bond is a type of investment security issued by the U.S. federal government. It is considered one of the safest investments in the world. When you buy a Treasury bond, you are essentially loaning money to the government for a set period of time, usually 20 or 30 years. In return, you receive interest payments every six months and the face value of the bond when it matures.
For example, let's say you buy a $10,000 Treasury bond with a 20-year maturity and a 2% interest rate. Every six months, you would receive $100 in interest payments. After 20 years, you would receive the full $10,000 face value of the bond.
Treasury bonds are different from other types of Treasury securities, such as Treasury bills and Treasury notes, which have different maturity lengths and interest rates.
You can buy Treasury bonds in a few different ways. You can bid on them at a government auction, buy them through a third-party like a bank, or purchase already-issued bonds on the resale market.