Carty & Company, Inc.
Carty & Company offers U.S. Treasury Bills, Notes, and Bonds, as well as U.S. Government Agency paper and Certificates of Deposit. Our staff and traders can competitively help you with any purchase or sale of these instruments.
U.S. Treasury securities (“Treasuries”)
U.S. Treasury securities are issued by the federal government and are considered to be among the safest investments you can make. This type of investment is backed by the “full faith and credit” of the U.S. government, meaning that come what may—recession, inflation, war—the U.S. government is going to take care of its bondholders. Treasuries are also liquid. A group of more than 20 primary dealers is required to buy large quantities of Treasuries every time there is an auction and stand ready to trade them in the secondary market.
U.S. Treasury bills are short-term instruments with maturities of no more than one year. U.S. Treasury notes are intermediate to long-term investments, typically issued in maturities of two, three, five, seven, and 10 years. U.S. Treasury bonds cover terms of more than 10 years and are currently issued in 30-year maturities with interest paid semiannually. These include:
- Treasury Bills
- Treasury Notes
- Treasury Bonds
Treasury bills are short-term securities that are non-interesting bearing with short maturities – a few days, four weeks, 13 weeks, 26 weeks, or 52 weeks. You buy treasury bills at a discount to face value and a paid the face value at maturity. Any interest income is subject to federal income taxes but is exempt from both state and local income taxes.
Treasury notes are fixed-principal securities with longer maturity dates – two, three, five, seven, and 10 years. The interest on these T-notes is paid semiannually, and the principal is paid at the note’s maturity date. Any interest is subject to federal income tax but is exempt from both state and local income taxes.
Treasury bonds are long-term, fixed-principal securities issued with a long maturity date – 30 years. Interest is paid semiannually with the principal being paid on the bond’s maturity date. Interest on treasury bonds is subject to federal income tax but is exempt from both state and local income taxes.
Government-Sponsored Bonds (Agency Bonds)
Agency bonds are bonds issued by government-sponsored enterprises, such as Fannie Mae and the Federal Home Loan Banks, and by wholly-owned government corporations such as the Tennessee Valley Authority (TVA). When you buy an agency bond, the issuer pays you interest on the number of bonds you purchase. At a stated date in the future (the maturity date), the issuer returns your principal to you if you still hold the agency bond. The maturity dates typically range from one year to 40 years. Some debt issued by government agencies is backed by the full faith and credit of the US government, but another agency’s debt is not.
Brokered Certificates of Deposit (“CDs”)
CDs are savings instruments issued by banks and savings and loan institutions. When you buy a CD, you lend the bank or savings and loan institution a set amount of money, which the institution may use to invest in securities or loans. CDs offer a variety of maturities and interest payment options and are insured, to a limited extent, by the FDIC. Unlike bank CDs, brokered CDs are tradable in the fixed income markets and do not have early redemption fees. Like most bonds, CDs carry some default risk or credit risk and are subject to market risk. For information about FDIC insurance, visit fdic.gov
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Contact Carty & Co.
Carty & Company has been helping clients meet their financial goals and make successful investments since 1970. If you have questions about how government bonds might help you secure your financial future, our experienced financial professionals can provide the answers you need to make the best decisions for you and your family’s future.