Certificate Of Indebtedness

AAA

DEFINITION of 'Certificate Of Indebtedness'

A short-term fixed income security once issued by the United States Treasury that had a coupon. A certificate of indebtedness was something of an "IOU" from the U.S. government, giving certificate holders the promise of a return of their funds with a fixed coupon, much like any other type of U.S. treasury. In 1981, the U.S. government stopped issuing such certificates and replaced them with short-term t-bills.

INVESTOPEDIA EXPLAINS 'Certificate Of Indebtedness'

Unlike treasury bills - which are sold at a discount and mature at par value without a coupon payment - certificates of indebtedness offered fixed coupon payments. Certificates of indebtedness typically matured in one year or less, much like the treasury bills and notes that succeeded the now-defunct certificates.

RELATED TERMS
  1. Banker's Acceptance - BA

    A short-term debt instrument issued by a firm that is guaranteed ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
  3. Coupon

    The interest rate stated on a bond when it's issued. The coupon ...
  4. U.S. Treasury

    Created in 1798, the United States Department of the Treasury ...
  5. Money Market

    A segment of the financial market in which financial instruments ...
  6. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with ...
Related Articles
  1. How Risk Free Is The Risk-Free Rate ...
    Options & Futures

    How Risk Free Is The Risk-Free Rate ...

  2. The History Of The T-Bill Auction
    Bonds & Fixed Income

    The History Of The T-Bill Auction

  3. 4 Steps To Building A Profitable Portfolio
    Mutual Funds & ETFs

    4 Steps To Building A Profitable Portfolio

  4. Basics Of Federal Bond Issues
    Bonds & Fixed Income

    Basics Of Federal Bond Issues

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center