Government Securities - Introduction
The US Government is the largest issuer of debt. It is also the issuer with the least amount of default risk. Default risk is also known as credit risk and is the risk that the issuer will not be able to meet its obligations under the terms of the bond in a timely fashion. The United States Government issues debt securities with maturities ranging from 3 months up to 30 years. The Treasury department issues the securities on behalf of the federal government and they are a legally binding obligation of the federal government. Interest earned by the investors from US Government securities is only taxed at the federal level. The state and local governments do not tax the interest income.