What Is the Definition of a T-Bond?

Video Transcript

"Okay, so what is a T-Bond, also known as a a T-Bill or a treasury bond. And these are; basically, you're purchasing debt of the U.S. government through the U.S. Treasury. The denominations on the T-Bond are much the same as a regular bond; they're a thousand dollars per per bond, and they'll pay a stated amount of of return, stated interest rate, when you purchase them. T-Bonds can go up and down just like any bond in value, and that's really going to be based on interest rates. And they are backed by the full faith and credit of the U.S. government, so it's a pretty safe instrument. You're also going to be exempt from federal income tax, or federal tax on the on the T-bond, which is a a nice addition to a portfolio if you're looking for trying to save some money on taxes. The T-Bond will pay you semi-annually, rather than quarterly as many corporate bonds do. So, those really are the differences between a corporate bond, and again, treasury bond is also known as a T-Bill or a T-Bond. With T-Bonds there's one thing that's important to remember; that if you're a shorter term investor rather than a longer, treasury bonds are issued for maturities of more than ten years."