What Is the 10 Year Treasury Yield?

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The 10-year Treasury bond yield is established daily.
The 10-year Treasury bond yield is established daily. (Image: investment image by Kit Wai Chan from Fotolia.com)

Simply put, a 10-year Treasury yield is the interest rate the U.S. government will pay you if you lend it money for 10 years. The interest rate varies daily and reflects the general movement of other investment markets.

Definition

A 10-year Treasury yield is the market interest rate on U.S. Treasury bonds that will mature 10 years from the date of purchase. The yield is also called the "coupon rate."

Who Sets It?

The Board of Governors of the Federal Reserve System establishes the interest rate on 10-year Treasury Bonds.

How Often Does It Change?

The 10-year Treasury yield is established daily.

Where To Find It

Most major newspapers publish the daily 10-year Treasury yield. The rates are also available at the U.S. Treasury Department website.

Benefits

The U.S. government is considered a risk-free borrower, and a 10-year Treasury Bond can become more valuable if the yield drops after purchasing it. For instance, if you buy a $10,000 bond at a 10 percent yield and the rate drops to 6 percent, the bond can either be held to maturation or sold at a profit in the bond resale market.

Disadvantages

If the interest rate falls below the yield at time of purchase, the bond becomes less valuable.

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