Course 108: Introduction to Government Bonds
Treasury Notes
In this course
1 Introduction
2 The Basics of Government Securities
3 Treasury Bonds
4 Treasury Notes
5 Collateralized Mortgage Obligations
6 Agency Bonds and Mortgage-Backed Securities
7 U.S. Savings Bonds
8 You Can Invest in Your Government through Government Securities

Treasury notes (T-notes) have middle-range maturities lasting from one year to 10 years. They are essentially the same as Treasury bonds except for the shorter maturities. T-notes are taxed federally, but not statewide or locally. They are no longer callable if issued today, although many T-notes issued before 1984 are. Treasury notes are sold through auctions using the bidding process. These securities pay fixed coupon rates of interest every six months.

Treasury notes with two-year or three-year maturities are sold in $5,000 denominations. All others are sold in $1,000 units.

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