• U.S. Treasury Securities
• Government Agency Securities
• U.S. Treasury Strips

U.S. Treasury Securities

U.S. Treasury securities are debt obligations issued and guaranteed by the full faith and credit of the U.S. government. They offer income that is exempt from state and local taxes and a variety of maturities from three months to 30 years. Treasury Securities are traded around the world, considered the most liquid of fixed income products, and can be liquidated at current market value prior to maturity.

Benefits

• Enjoy tax-advantaged income and lower investment risk when diversifying your investment portfolio.
• This flexible investment is available in a variety of maturities so you can choose the time frame that works best for you.

Features

• Income from interest and repayment of principal is generally regarded with a high degree of safety.
• Income from U.S. Treasury Securities is free from state and local taxes.
• If circumstances change, U.S. Treasury Securities make up the most actively traded market in the world. You are not locked in until the bond's maturity.
• Treasury Notes and Bills pay semi-annual interest payments and repay principal at maturity.
• Treasury Bills are purchased at a discount and mature at face value.

Additional Listings

• Treasury Bills-Treasury Bills have maturities of one year or less. Treasury Bills are generally purchased at a discount from par, make no periodic interest payments, and mature at face value (par). The difference between the discounted purchase price and par value is generally seen as interest income.
• Treasury Notes-Treasury Notes are issued with 2-, 5-, and 10-year maturities and make semi-annual coupon payments.
• Treasury Bonds-Treasury Bonds are issued with 30-year maturities and make semi-annual coupon payments.

Government Agency Securities

Government Agency Securities are debt obligations issued by U.S. Government Sponsored Enterprises such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). While Government Agency Securities are not backed by the full faith and credit of the U.S. Government, most have credit lines with the U.S. Treasury and are afforded the highest credit ratings.

Benefits

• Enjoy tax-advantaged income and lower investment risk when diversifying your investment portfolio.

Features

• Income from interest and repayment of principal is generally regarded with a high degree of safety, second only to U.S. Treasury Securities.
• Income from some, but not all, Government Agency Securities is free from state and local income taxes.
• Government Agency Securities offer yields that are generally higher than comparable Treasury Securities due to the slight increase in credit risk.
• If circumstances change, Government Agency Securities are actively traded in the secondary market. You are not locked in until the bond's maturity.
• You receive monthly payments of interest and principal.

U.S. Treasury Strips

Treasury STRIPS are the most common type of Zero Coupon Bond. Created by the Treasury Department in 1985, STRIPS stand for Separate Trading of Registered Interest and Principal Securities.

Like all Zero Coupon Bonds, Treasury STRIPS are purchased at a substantial discount from par, make no periodic interest payments, and mature at face value (par). Since Treasury STRIPS are sold at significant discounts from their maturity value, the difference between this discount value and the maturity value is considered the bond's income. The growth in value over time is the bond's "accretion." Typically, you must pay federal taxes on the interest accreted for the year, even though no cash is received until the bond matures or is sold.

Benefits

• Enjoy tax-advantaged income with no reinvestment risk when diversifying your investment portfolio.

Features

• STRIPS are purchased at a discount and mature at face value.
• The payment of face value is generally regarded as the safest of all debt securities because STRIPS are backed by the full faith and credit of the U.S. Government
• STRIPS are not subject to reinvestment risk because there is no coupon payment to reinvest at potentially lower interest rates.
• Income from STRIPS is exempt from state and local taxes.
• If circumstances change, STRIPS are actively traded in the secondary market. You are not locked in until the bond's maturity.