TreasuryDirect is a great resource for investing in government bonds.
What types of bonds does TreasuryDirect offer?
There are several types of securities available through TreasuryDirect:
- Treasury bills (maturing in one year or less)
- Treasury notes (maturing in periods ranging from two to ten years)
- Treasury bonds (maturing in periods greater than ten years)
- Inflation-protected securities (TIPS)
- Floating rate notes
- Series I savings bonds
- Series EE savings bonds
Since selling bonds before maturity is more difficult and costly compared to other aspects of the service, TreasuryDirect is best for those who plan to hold their bonds until maturity, at which point the principal is repaid along with the final interest payment.
You can only purchase new issues on TreasuryDirect, so once a bond is trading on the secondary market, it is no longer available for purchase. Therefore, those who plan to trade bonds may want to look for a suitable option that meets their needs.
Treasury zero-coupon bonds (STRIPS), which are government securities that have had their interest and principal payments separated, are not available for purchase on the site.
How does TreasuryDirect work?
The website describes the service as follows:
“TreasuryDirect is the first and only financial services website that allows you to buy and redeem securities directly from the U.S. Department of the Treasury in an electronic, paperless form. You enjoy the flexibility of managing your savings portfolio online as your needs and financial circumstances change – all while knowing your money is backed by the full faith and credit of the U.S. government.”
One of the main features of the site is its user-friendliness. It makes purchasing government bonds straightforward and presents information clearly and in an easy-to-find manner. The registration and arrangement process for buying government bonds takes about 10 to 15 minutes.
The site requires you to enter basic information such as your Social Security number, email address, bank account number, and bank routing number. The purpose of the banking information is to allow for electronic transfers between your bank account and your TreasuryDirect account. You will also set a password and select and answer security questions, along with other security measures.
Once logged in, you can choose from several ways to purchase government bonds, fund your purchases, and receive principal and interest. One option for buying savings bonds is the payroll savings plan, which allows you to make recurring purchases of electronic savings bonds by deducting money from each paycheck and sending it to your TreasuryDirect account.
A source of information about government bonds
In addition to providing a means to purchase government securities, the TreasuryDirect website also contains a wealth of information that can help you learn more about the treasury market and the federal government’s borrowing operations.
Among the useful features are the treasury auction schedule and recent auction results. The site also includes an explanation of how the auction process works, savings bond rates, calculators, and links to other government sites related to the economy. It even has a section for kids.
The Balance does not offer tax, investment, or financial services and does not provide advice. Information is provided without regard to the investment objectives, risk tolerance, or financial circumstances of any specific investor and may not be suitable for all investors. Past performance is not indicative of future results. Investing involves risks, including the risk of loss of principal.
Source: https://www.thebalancemoney.com/easiest-way-to-invest-in-government-bonds-417135
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