Treasury Receipt


DEFINITION of 'Treasury Receipt'

A zero-coupon bond that doesn't pay interest at regular intervals between the date of issue and maturity, but instead accrues the interest and pays it with the principal at maturity. Treasury receipts are sold by an intermediary, such as a brokerage firm, that issues a receipt to the purchaser representing the underlying treasury securities.

BREAKING DOWN 'Treasury Receipt'

Treasury receipts have many different acronyms, including: STRIPS (Separate Trading of Registered Interest and Principal Securities), CATS (Certificates of Accrual on Treasury Securities), TIGRs (Treasury Investment Growth Receipts) and COUGRs (Certificate of Government Receipts). Generally, the receipts were created when a brokerage house would separate the coupon from the principal of a Treasury bond or certain mortgage-backed security bonds, and repackage them so that the principal and coupon were paid at maturity, a process that was permitted by the 1986 Tax Act. Now, the Treasury Department can issue its own zero-coupon bonds, lessening the appeal of the brokerage receipts.

  1. Certificate Of Government Receipts ...

    U.S. Treasury fixed-income securities that are stripped of their ...
  2. Zero-Coupon Bond

    A debt security that doesn't pay interest (a coupon) but is traded ...
  3. Certificates Of Accrual On Treasury ...

    Issued by the U.S. Treasury and stripped by a financial intermediary, ...
  4. Treasury Lock

    A hedging tool used to manage interest-rate risk by effectively ...
  5. Custodian

    A financial institution that holds customers' securities for ...
  6. Treasury Investment Growth Receipts ...

    Stripped Treasury securities offered at a significant discount ...
Related Articles
  1. Retirement

    Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?
  2. Bonds & Fixed Income

    Advanced Bond Concepts

    Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration.
  3. Investing

    Where the Price is Right for Dividends

    There are two broad schools of thought for equity income investing: The first pays the highest dividend yields and the second focuses on healthy yields.
  4. Financial Advisors

    Ditching High-Yield Bonds for Plain Vanilla Ones

    In a low-rate environment, it's tempting to go for higher yield bonds. However, you might be better off sticking with the plain vanilla ones.
  5. Bonds & Fixed Income

    What is an Indenture?

    An indenture is a legal and binding contract between a bond issuer and the bondholders.
  6. Bonds & Fixed Income

    Credit Default Swaps: An Introduction

    This derivative can help manage portfolio risk, but it isn't a simple vehicle.
  7. Investing

    Understanding High Yield Fund Performance

    For exchange traded fund, not all high-yield ETFs are the same. So, we take a look at one high yield investment in particular to set the stage for you.
  8. Investing

    Is US Inflation Too Low?

    One reason the Fed has delayed its first rate hike: U.S. inflation has been persistently running below the stated 2 % level the central bank seeks to target.
  9. Mutual Funds & ETFs

    Are Vanguard ETFs a safe investment?

    Learn about safe ETF funds available from Vanguard. Learn why bond funds have low volatility, but still do have certain risks for investors.
  10. Bonds & Fixed Income

    3 Signs It's Time to Sell Your Bonds

    Learn about three major signals that you should sell your bonds right now, including impending interest rate hikes and bond issuer instability.
  1. What are the maximum Social Security disability benefits?

    The average Social Security disability benefit amount for a recipient of Social Security Disability Insurance (SSDI) in 2 ... Read Full Answer >>
  2. How do I calculate the future value of an annuity?

    When planning for retirement, it is important to have a good idea of how much income you can rely on each year. There are ... Read Full Answer >>
  3. Have hedge funds eroded market opportunities?

    Hedge funds have not eroded market opportunities for longer-term investors. Many investors incorrectly assume they cannot ... Read Full Answer >>
  4. Are high yield bonds a good investment?

    Bonds are rated according to their risk of default by independent credit rating agencies such as Moody's, Standard & ... Read Full Answer >>
  5. Do mutual funds invest only in stocks?

    Mutual funds invest in stocks, but certain types also invest in government and corporate bonds. Stocks are subject to the ... Read Full Answer >>
  6. What is the relationship between the current yield and risk?

    The general relationship between current yield and risk is that they increase in correlation to one another. A higher current ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center