U.S. Bond

A bond is a debt security. The issuer owes the holders a debt, and is obliged to pay interest and to repay the principal at a later date, which is called maturity.

Bonds and stocks are both securities. However, they are different in that stockholders have an equity stake in the company whereas bondholders have a creditor stake in the company. In other words, stockholders are owners whereas bondholders are lenders.

A large number of people buy the U.S. government bonds because the U.S. government is the most reliable borrower in the world. The U.S. government has never defaulted on a loan. When people invest in the U.S. government, they do not have to worry about the U.S. not paying back.
The U.S. government issues several different kinds of bonds through the Bureau of the Public Debt, an agency of the U.S. Department of the Treasury. Treasury debt securities are classified according to their maturities.

Treasury Bills have maturities of one year or less. Treasury Bills are issued in three maturities. Bills with 91-day and 182-day maturities are auctioned by the Treasury each Monday. Bills with a 364-day maturity are auctioned every four weeks on Thursday, 13 times a year.

Treasury Notes have maturities of two to ten years. Treasury Notes are issued in two-, three-, five-, and ten-year maturities. The two year and five year Notes are auctioned each month while the three year Notes are issued quarterly, and ten year Notes are auctioned six times a year. All Notes pay interest twice a year.

Treasury Bonds have maturities greater than ten years. Treasury Bonds are usually issued in thirty-year maturities, and pay interest twice a year.

Treasury Bills, Notes, and Bonds are all issued in face values of $1,000 though there are different purchase minimums for each type of security.