Treasury Notes are medium term Government securities. Their initial maturities are 2 years, 5 years 10 years. They are backed by the US Government, thus they carry no credit risk.
T Notes pay interest every 6 months and they are priced in 32nds. Many loans are priced off of the various maturities of these notes.
These securities are auctioned monthly or quarterly and bidded on by US Government securities dealers.
All of these securities are AAA rated. The yield on treasury notes will be lower than corporate bonds and agency securities of the same maturity. Most broker dealers and brokerage firms can offer investors T-Notes. The minimum investing amount is $1000, but normally the buying of them should be in amounts of $10,000 or more to make the income worth it.
Copyright 2006 American Investment Training, Inc.