What is a Government Security?

A government security is one of the most sought after and safest forms of investment that is currently available. Here are the basics of the government security and how it works.

Government Security

The government security is a type of debt instrument that is issued by a government. The government sells these to private investors in order to raise money for various expenses. Whenever an investor purchases this type of security, they will typically receive a steady interest rate over the life of the instrument.

Examples

When dealing with the United States government, there are a number of different securities that you could choose to purchase. One of the most common types of government securities is the savings bond. With the savings bond, you purchase one for half of the face value. After a certain amount of time, the value of the bond has increased to the face value. Savings bonds can earn interest for as long as 30 years.

Another example of a government security is the T-bill. This is short for Treasury Bill. These are debt instruments that are issued in $1,000, $5,000, $10,000, $25,000, $50,000, $100,000, and $1,000,000 increments. This type of government security is very short-term with terms as sure as 3 months.

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