Government Security

Loading the player...

What is a '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.

RELATED TERMS
  1. Japanese Government Bond - JGB

    A bond issued by the government of Japan. The government pays ...
  2. Bureau Of Public Debt

    An agency of the United States Department of the Treasury that ...
  3. Debt Issue

    A fixed corporate or government obligation, such as a bond or ...
  4. Government Paper

    Debt securities that are issued or guaranteed by a sovereign ...
  5. Limited Government

    A political system in which legalized force is restricted through ...
  6. Government Purchases

    Expenditures made in the private sector by all levels of government, ...
Related Articles
  1. Investing Basics

    What are Government Securities?

    Government securities are debt instruments that governments issue to raise capital.
  2. Entrepreneurship

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
  3. Insurance

    The Government And Risk: A Love-Hate Relationship

    Though the U.S. government can help its citizens by subsidizing risky loans, the costs always come back to the taxpayers.
  4. Bonds & Fixed Income

    The Differences Between Bills, Notes And Bonds

    Treasury bills, notes and bonds are all marketable securities sold by the U.S. government to pay off debts and to raise cash.
  5. Mutual Funds & ETFs

    The 3 Largest U.S. Government ETFs (TIP, SHY)

    Learn about the benefits of U.S. government ETFs, and explore the three largest government funds available on the market as of March 2016.
  6. Economics

    The Top Reasons Behind The U.S. National Debt

    A budget deficit occurs when a government’s receipts fall short of its expenses. The government then issues securities to keep its programs running.
  7. Taxes

    How Much Is The Government Making Off You?

    More than 65% of income-tax-paying Americans got a tax refund in 2009. It may have been good for taxpayers, but it was even better for the government.
  8. Economics

    How Governments Influence Markets

    The biggest influence in the markets today can create some unintended consequences.
  9. Investing News

    Money Market vs. Short-Term Bonds: A Compare and Contrast Case Study

    Discover characteristics of money market and short-term bonds, including how the investments are alike and different, and the benefits and risks each offers.
  10. Investing

    Treasury Bills

    Learn more about this government debt obligation and how it can fit into your portfolio.
RELATED FAQS
  1. Are long-term U.S. government bonds risk-free?

    For any debt obligation to be considered completely risk-free, investors must have full faith that the principal and interest ... Read Answer >>
  2. What's the difference between bills, notes and bonds?

    Treasury bills (T-Bills), notes and bonds are marketable securities the U.S. government sells in order to pay off maturing ... Read Answer >>
  3. What are the different groups involved in corporate governance?

    Learn about the challenges inherent to defining and executing corporate governance, and understand why different groups work ... Read Answer >>
  4. Is the Social Security administration a government corporation?

    Learn the difference between a government agency and a government corporation, and how the Social Security Administration ... Read Answer >>
  5. How is the Social Security trust fund invested?

    Read about how the Social Security trust fund is set up, paid into, borrowed from and invested by the U.S. government and ... Read Answer >>
  6. How does limited government affect corporate citizens?

    Read about the role of consumers and governments, especially limited governments, in supporting or requiring good corporate ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center