What are Treasury Securities?
U.S. Treasury securities-such as bills, notes and bonds-are debt obligations of the U.S. government. When you buy a Treasury security, you are lending money to the federal government for a specified period of time.
Because these debt obligations are backed by the "full faith and credit" of the government, and thus by its ability to raise tax revenues and print currency, U.S. Treasury securities are considered the safest of all investments. They are viewed in the market as having no "credit risk," meaning that it is virtually certain your interest and principal will be paid on time.
Because of this unique degree of safety, interest rates are generally lower than for other widely traded debt, such as corporate bonds.
The focus of this information is on the marketable Treasury securities, those that are of most interest to individual investors because they trade in the open market. There are other classes of Treasury debt-called non-marketable securities that are not transferable but can be purchased from and redeemed by the government. U.S. Savings Bonds fall into this category, and, even though they are non-marketable, are discussed here because they are designed for individual investors.