Finance Of The Public Debt

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Buying Treasury Securities
The Bureau of the PUBLIC DEBT
Department of the Treasury
Treasury Securities

The Treasury issues three types of marketable securities - bills, notes, and bonds. These securities are direct obligations of the United States Government. When originally issued, they are sold through an auction process. They are commonly known as marketable securities because after their original issue that may be bought or sold in the secondary (commercial) market at the prevailing market prices through financial institutions, brokers, and dealers in investment securities.

The primary distinction between a bill, note, and bond is the length of time, or term, the security will be outstanding from the date of issue. Treasury bills
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Treasury notes and bonds bear a stated interest rate and the owner receives semi-annual interest payments.

Marketable Treasury securities are not redeemable before maturity unless, by the terms of their issue, they are callable. If called, they stop earning interest on the date called. Investors are informed at the time of purchase if their securities are subject to call.

Marketable Treasury securities are issued only in book-entry form at original issue. Book-entry securities are represented by accounting entries maintained electronically on the records of the Treasury, a Federal Reserve Bank or Branch, or financial institution. Definitive securities in the form of engraved certificates are no longer offered at original issue.

Features of Book-entry Accounts

Book-entry securities may be held on the records of a Federal Reserve Bank or Branch, or by the Department of the Treasury.

The system operated by the Federal Reserve Banks who serve as fiscal agents of the Treasury, is the Treasury/Reserver Automated Debt-Entry System (TRADES), commonly referred to as the commercial book-entry system. Investors whose securities are maintained in this system generally have purchased them through either a financial institution, or a government securities dealer. These securities are reflected in the records of a Federal Reserve Bank or Branch as book-entry issues held for the account of a depository institution. The depository institution
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