Government Security


DEFINITION of 'Government Security'

A bond (or debt obligation) issued by a government authority, with a promise of repayment upon maturity that is backed by said government. A government security may be issued by the government itself or by one of the government agencies. These securities are considered low-risk, since they are backed by the taxing power of the government.

BREAKING DOWN 'Government Security'

Government securities promise repayment of principal upon maturity as well as coupon or interest payments periodically. Examples of government securities include savings bonds, treasury bills and notes. Government securities are usually used to raise funds that pay for the government's various expenses, including those related to infrastructure development projects. Because they are low risk, the return on the securities is generally low.

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