Economics Bonds Questions Medium
The main difference between a treasury bond and a treasury note lies in their respective maturity periods.
A treasury bond is a long-term debt security issued by the government, typically with a maturity period of 10 to 30 years. These bonds pay a fixed interest rate every six months until maturity, at which point the principal amount is repaid to the bondholder. Treasury bonds are considered to be relatively low-risk investments due to the backing of the government.
On the other hand, a treasury note is a medium-term debt security issued by the government, usually with a maturity period of 2 to 10 years. Similar to treasury bonds, treasury notes also pay a fixed interest rate every six months until maturity, at which point the principal amount is returned to the bondholder. Treasury notes are also considered to be relatively low-risk investments.
In summary, the key difference between a treasury bond and a treasury note is the length of their maturity periods. Treasury bonds have longer maturities, typically ranging from 10 to 30 years, while treasury notes have shorter maturities, usually ranging from 2 to 10 years.