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How to Buy Treasury Bonds in 2019
Treasury bonds, bonds and notes
You decide to invest in Treasury bonds because they have the least risk of default and other investment losses because they have a fixed interest rate and face value paid at the time of maturity.
Because they have the support of \"full faith and credit\" in the United States. S. government.
There are basically three ways to buy Treasury bonds when they are issued, or T-
Bonds, as they say: directly from the United StatesS.
Get funds through a broker or bank.
S. Treasury bonds for more than 10 years
This means that you have to hold it for more than 10 years to get the face value of it.
Most bonds that pay interest every six months are issued in 30 years.
Auction occasionallyyear \"zero-
Bonds that expire in 10 years but do not pay interest.
The price and yield of any particular national debt is determined by the auction.
This means that the price you pay may be greater than, less than or equal to the face value of the bond.
The minimum face value of the bond is $1,000, and the minimum bid accepted is $100, an increase of $100 per face value.
The maximum limit is $5 million.
So, you bid to buy the national debt at the national debt auction.
Treasury bonds were auctioned on a monthly basis, but were originally issued for Treasury bonds. S.
Expenditure requirements for February, August, November and the government.
Bonds are also re-auctioned
January, April, June, July, September, October, December, and opening. A re-
The maturity date, coupon rate and interest payment date of the open Securities are the same as the original securities, but the issue date is different and usually the price is different.
In one auction, the Ministry of Finance accepts two bids: one is a non-competitive bid and the other is a competitive bid.
You can use non-competitive bids from the USS.
US Treasury direct investment.
A government portal through a bank or broker.
To make a competitive bid, you must use a bank or broker unless you have a TAAPS account.
This is because banks or brokers are part of the TAAPS system: the Treasury automated auction processing system.
According to the Ministry of Finance, TAAPS is an application \"for exclusive use by institutions directly entering the United States\"S.
\"The system receives and processes tenders sent to the United States electronicallyS.
Allows institutions to purchase securities directly, reduce or eliminate intermediary costs, and conduct direct bidding on their computers.
Individuals, as well as entities such as trusts, real estate, companies and partnerships, can buy government bonds.
In any auction, non-competitive bidders can buy up to $5 million in bonds, and competitive bidders can buy up to 35% of their initial offerings.
Buy T-the easiest way
Bonds are bid directly in non-competitive terms.
However, you can make competitive bidding through a bank or broker.
To do this, you have to understand the price you are willing to pay for the bond and the yield on the bond\'s maturity.
And pay the bid to the broker or bank.
Any fixed price
The bond, depending on the relationship between its yield to maturity and interest rates.
For example, if the yield to maturity is greater than its interest rate, the price you pay may be lower than its face value or its \"face value\" value.
If the yield to maturity is the same as the interest rate, the price will be \"equal to the face value\" and if the yield to maturity is lower than the interest rate, the price you pay will be greater than its face value.
When you buy T-
Bond, any interest it accrued since the last payment of interest has been added to the purchase price of the bond.
Investors receive full interest payments on the next interest payment day.
Average yield as of February is 30-
The annual interest rate on US Treasury bonds remains around 3%.
After the bond has expired, you can make money and reinvest the interest paid in other bonds.
But you don\'t have to hold bonds for 30 years.
You can sell it on the secondary market after the first 45 days of holding it.
The risk of Treasury bonds is that interest rates will exceed 30-
Reduce the value of bonds held during the year.
Because of this, although the interest is relatively low, but 30-
Annual bonds usually pay higher interest rates than short-term bonds
To compensate the buyer for the maturity of the risk.
For example, the average current yield on US Treasury bonds is 3%.
But core inflation
The rate of price increases-
Still below 2% in 2018.
So if the core annual average inflation rate in the United States remains below 3%,S.
, You don\'t need to do anything to make money other than charge interest.
Also, there is no risk of losing the principal, just like other investments, because you are guaranteed by the USS.
When the bond expires, the government will receive the face value of the bond.
Similarly, if the target rate of the federal fund
Interest rates charged by the US government. S.
The government in which banks borrow money from \"last lenders --
Still Below 3% you may still get a higher yield on maturity than your money sitting in the bank and the bank will pay you less because it will be less to borrow money from the federal government.
That\'s why there are competitive bids as well, so buyers can get the specified rate instead of accepting any rate set at the time of the auction.
That\'s why investors can get another type of Treasury securities: Treasury inflation --
Protected Securities, known as TIPS, are another debt tool offered by US auctionsS. Treasury.
TIPS, also issued in electronic form, are sold in increments of $100 with a minimum purchase price of $100 with 5, 10 and 30-The year expires.
Like other such debts, interest rates are determined at the time of the auction.
With the prompt, the principal is adjusted by the change of the consumer price index (CPI)
This is the measure of inflation.
As consumers pay higher prices for certain goods --
The rise in the index shows that --
The principle of tipping has increased.
As the index drops-
Anti-inflation, or deflation under zero --
The principal of the tip is reduced.
Because the tip is linked to the CPI, the amount paid when the tip expires and the amount of tip interest paid every six months are different.
Tips pay interest at a fixed rate.
However, since the interest rate applies to the adjusted principal or variable principal, the amount of interest payments for different periods may vary.
As the rise in CPI suggests, interest payments increase if inflation occurs.
Conversely, interest payments will decrease if deflation occurs.
However, when the tip expires, you will receive the original principal or the adjusted principal, whichever is greater.
That\'s why TIPS is also considered a protective measure against deflation. And the U. S.
The Treasury actually provides a hint of the inflation index ratio so that investors can easily calculate the impact of CPI changes on the principal.
Like others, non-competitive bids can be submitted directly to the United StatesS.
Through a bank or broker, a bank or broker is required for competitive bidding.
TIPS, like other tools, can be held until due or sold in the secondary market before due.
Bidders can purchase tips of up to $5 million through non-competitive bids in one auction, or purchase up to 35% of initial releases through competitive bids.
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