Treasury bonds are one of three main securities issued by the U.S. federal government. A person can buy a treasury bond for 20 or 30 years. Treasury bonds, along with other treasury securities, are regarded as one of the safest investments in the world. Given their high demand and safety, treasury bonds only produce low interest rates averaging between 1.375% to 2.375% in 2021 depending on maturity length. The owner receives interest payments every six months and the face value upon maturity. A person can buy bonds by bidding at a government auction, using a third-party like a bank, or buying already issued bonds at a resale market.
[Last updated in September of 2021 by the Wex Definitions Team]