Your Complete Guide to Treasury Bonds US

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Andrew Hayward

Investing is one of the best ways you can help grow your wealth. If you are an investor or already investing, you may have noticed that low-interest rates in recent months have made savings accounts a poor choice for those wanting to keep their cash safe and grow at the same time. These slow growth rates in savings accounts mean that the value of your savings may in fact be depreciating as they fail to keep pace with inflation.

If you want to start investing but you don’t want to expose yourself to too much risk, you may want to consider buying bonds. Bonds are investment options that can provide a passive income and can be a valuable way to grow your wealth in the long term.

There are a variety of ways to earn guaranteed income, such as fixed-rate bonds, but it’s important to know which are right for you.

If you want to know more, read on for your comprehensive guide to treasury bonds US.

Where to buy treasury bonds in the US in 2023

The following investment platforms provide US investors with a choice of treasury bonds to choose from.

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Interactive Brokers

Interactive Brokers offer a range of treasury bonds for US investors

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Fidelity Investments

Fidelity is one of the leading brokers in the US and offers customers a wide range of investment bonds.

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Merrill Edge

Merrill, part of the Bank of America family, has a great choice of investment bonds.

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What are bonds?

To put it simply, a bond is essentially an IOU to a company or government. When you invest in a bond, you lend money to an organization for a set period of time, generating income for yourself with a fixed rate of interest.

By the time the bond matures, which can be anywhere from six months up to five years, depending on the provider, you will be repaid your original investment with some interest.

What types of bonds are available?

Usually, government and corporate bonds are the most commonly available and known. That said there are other types of bonds available on the market but as a rule of thumb tend to be less well-known. These are the five most popular types of bonds available.

Corporate bonds

These are some of the most common types of bonds that you might come across. Typically, businesses sell bonds whenever they need to raise money so you’re essentially buying their debt.

Government Bonds

Government bonds are issued by the US Treasury on behalf of the federal government and work in a very similar way to corporate bonds but are considered to be much safer. This is because there is a negligible chance of the government defaulting on its debt obligations. They are also sometimes known as “T-bonds”.


These are bonds with a higher credit rating than corporate bonds, and as such are a lower credit risk option.

High-yield bonds

These are bonds with lower credit ratings, and therefore a higher credit risk than investment-grade bonds. Their higher risk is offset by higher interest rates.

Municipal bonds

Municipal bonds, also known as “munis,” are debt securities issued by states, cities, counties, and other government entities.

Regardless of the type of bond, you may decide to invest in, your money will be locked away for an agreed amount of time. Usually, the longer the time period you commit to leaving your savings untouched, the more interest you’ll get. Fixed-rate savings bonds can be a useful way to grow your money, but it’s important to be aware that if interest rates suddenly rise, your fixed-rate bonds will be locked in at the rate offered when you bought them.

Of course, the opposite is also true. If your interest rate is likely to fall, by locking in fixed-rate savings bonds, you can help to maximize your profits.

Additionally, if you do need to withdraw money from your bond before it reaches maturity, you may be charged a penalty fee for the early withdrawal. It is not like keeping savings accounts, in which you have instant access to your money, as you have to keep it with your provider for a fixed term.

This is why it’s important to carefully consider whether fixed-rate savings bonds are right for you.

Are bonds guaranteed not to lose money?

As a general rule, bonds can be considered a safer investment than most other forms, and for this reason are a popular choice for investors wanting to diversify their portfolio, especially during times of uncertainty. That being said, it’s important to remember that all investments come with a degree of risk, no matter how small that may be.

When you buy a bond, the organization that you buy it from promises to repay you in full, along with some interest. As such your initial investment amount will result in a profit.

The only risk is that if the organization suffers severe financial difficulties, then it may be unable to meet its debt obligations. However, this is something that is unlikely to happen.

What are the safest bonds to invest in?

One common question that people want to know about bonds is which type of bond is the safest to invest in. While there is a straightforward answer to this question, the issue of risk is a broader topic.

Typically, the safest bond you can buy is a government bond. This is because, as I mentioned earlier, there is almost no chance of the government being unable to meet its debt obligations.

In fact, US Treasury bonds are considered by many investors as one of the safest bonds in the world, as the government has never defaulted on its debt repayments.

However, because T-bonds are a very low-risk investment, they are unlikely to pay a high rate of interest so you may not make a significant return. Typically, the more risk an investment has, the greater prospect it has for returns.

If you want to know more about the relationship between risk and returns, you may want to speak to a financial advisor.

How do I buy bonds?

Typically, the process of buying bonds differs depending on which type of bond you want.

Corporate bonds

For example, if you want to buy corporate bonds then you usually need to speak to a stockbroker, who can help you in a variety of ways. For example, they can give useful advice for which bonds to invest in, the length of the bonds, and the level of risk you should be prepared to undertake.

Government bonds

If you live in the US, you can buy gilts directly from the US Treasury. To find out more visit the Treasury Direct portal where you can learn everything you need to know about this market and buy bonds.

Typically, you can invest as little as $25 in a Treasury bond.

Savings bonds

You can buy a savings bond, originally introduced by Franklin D. Roosevelt during the Great Depression, on the Treasury Direct portal.

While you don’t need to seek professional advice before buying savings bonds, it may be beneficial to do so as they can help to assess whether they are right for you.


Investing in mutual funds can also be a valid alternative if you’re apprehensive about buying bonds directly. This way you can pool your money with other people and then invest the money in a range of assets, including bonds.

Choosing a regulated provider

It’s often a good idea when buying bonds to choose a bank, building society, or provider that’s regulated by the Securities and Exchange Commission (SEC).

This is because investments that are not regulated could pose an unnecessary risk to your investing wealth.

While you still face investment risk when buying bonds, these watchdogs ensure that financial services companies are held to high trading standards.

Are bonds right for me?

To put it simply, there are a variety of pros and cons when it comes to buying bonds, so it’s important to think carefully before making a decision.


  • Bonds offer regular payments
  • You have the freedom to choose how long to invest for
  • There are different levels of risk available to suit your tolerances


  • Once you have a bond, you may have to pay a fee if you want to withdraw it early
  • Low-risk bonds tend to come with low returns
  • The Federal Deposit Insurance Corporation (FDIC does not insure money invested in bonds

Is it possible to sell a bond once I’ve bought it?

If you buy a bond, the simplest way to profit is to simply wait and collect the regular interest payments. When the bond reaches maturity, you should also be paid back your original capital. However, you do have other options.

As you may have read in our previous article explaining low-risk investments, when you buy bonds you may have the option to trade them on a secondary market.

Typically, once corporate bonds have been issued, their value fluctuates and if the price increases since you bought it, you could consider selling it on for a profit.

How can working with a financial advisor help me?

When it comes to growing your wealth through investing, there can be many potential issues to be aware of. One of the most significant ones can be the number of tax rules which you might accidentally stumble into if you’re not careful.

Depending on your level of income, and so whether you’re a basic-rate taxpayer or a higher-rate taxpayer, these costs could significantly eat into your profits from investing. This is why you may want to avoid having to pay taxes where you can.

While the internet means that it’s never been easier to get involved in investing, it’s important to make sure that you’re making an informed decision with your money.

This is where working with a financial advisor can help you, as they can make sure that when you pay tax on your guaranteed income bonds, you don’t pay any more than you need to.

They can also help you to accurately assess your tolerance to risk to see what type of bonds would be right for you in your individual circumstances. They can also keep you updated on market movements. For example, they may encourage you to buy fixed-rate bonds if there is an imminent base rate fall which could impact your interest rate.

An advisor can ensure that you’re making properly informed decisions when investing, help you to grow your wealth in the most tax-efficient way with the best investment choices possible, and give you a greater degree of financial confidence.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Please note that this article does not constitute financial advice.

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