How to Read Treasury Bond Prices

The U.S. government issues treasury bonds.

United States Treasury Bonds are bonds issued by the U.S. government. The bonds pay a semi-annual interest, meaning the bond will have an interest payment to the investor two times each year. U.S. Treasury Bonds mature every 30 years. After 30 years, the investor receives the face value of the bond.

Things You'll Need

• Newspaper
• Computer with Internet connection

Instructions

1. Find the United States Treasury Bond listings in a newspaper and online sources such as Yahoo's Bonds Center. Yahoo's Bonds Center allows an investor to look up individual bonds offered by companies along with United States Treasury Bonds as a free tool. There are usually six headings for the bonds: rate, maturity, bid, ask, change and ask/yield.

2. Determine the interest rate and maturity date. The interest rate is under the rate column. This number provides how much interest the bond will pay semi-annually. The maturity date is under the maturity heading. This is the date the bond pays back the face value of the bond.

3. Determine the bid and asking prices. The bid price is the highest bid a bond received. The asking price is the price at which an investor is willing to sell his bond.

4. Determine the ask/yield. The ask/yield is the actual yield the bond will pay out. It is a combination of the interest price and the asking price. If the bond sells for a premium, the ask/yield will be lower than the interest rate. If the bond sells for a discount, the ask/yield will be higher than the interest rate.

References

• Treasury Direct: Treasury Bonds
• Investing In Bonds: Reading Bond Prices In The Newspaper
• Yahoo: Bonds Center