A Treasury bond is
Treasury bonds (T-bonds) are government debt securities issued by the federal government
that have maturities greater than 10 years.
T-bonds earn periodic interest until maturity,
at which point the owner is also paid a par amount equal to the principal.
There are three different ways to buy treasury bonds
- Through the U.S. Treasury Department.
You can buy new Treasury bonds online by visiting Treasury Direct.
To set up a Treasury Direct account, you must be 18 or older and legally competent.
You will need a valid Social Security Number, a U.S. address and an account at a U.S. bank.
The Treasury does not collect fees nor does it mark up the bond’s price. - Through a brokerage.
Most online brokerages sell Treasury bonds, corporate bonds and municipal bonds.
Brokers like Fidelity, Charles Schwab, E*Trade and TD Ameritrade offer extensive bond listings.
However, the purchasing process through an online brokerage is nowhere near as straightforward as through Treasury Direct.
Bond prices vary from brokerage to brokerage, thanks to transaction fees and markups or markdowns. - Through a mutual fund or an exchange-traded fund (ETF).
A bond fund is a good option if you don’t have the cash to spend on a diverse array of individual bonds.
You often have to buy individual bonds in large, often pricey units.
With a bond fund, you can get diversity for a lower cost.
However, bond funds don’t have a set maturity like individual bonds,
so you may see your interest payments vary and your income is not guaranteed.
So there you have my 3 ways to buy treasury bonds
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