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.

 

series 62 exam prep

Types Of Government Securities

Related Articles
  1. Taxes

    Understanding Default Risk

    Default risk is the chance that companies or individuals will be unable to pay their debts.
  2. Financial Advisor

    7 Questions to Consider Before Investing in Bonds

    There is a significant number of questions every investor, private or institutional, should consider before investing in bonds.
  3. Financial Advisor

    Advising FAs: Explaining Bonds to a Client

    Most of us have borrowed money at some point in our lives, and just as people need money, so do companies and governments. Companies need funds to expand into new markets, while governments need ...
  4. Insights

    Why and When Do Countries Default?

    Countries can default on their debt. This happens when the government is either unable or unwilling to make good on its fiscal promises.
  5. Investing

    How Credit Rating Risk Affects Corporate Bonds

    Credit migration risk is a vital part of the credit risk assessment, specifically with regard to corporate bonds which underlie numerous rating changes.
  6. Investing

    What are Government Securities?

    Government securities are debt instruments that governments issue to raise capital.
  7. Financial Advisor

    Junk Bond

    Find out more about these bonds that have a high risk of default.
Frequently Asked Questions
  1. What's the difference between publicly- and privately-held companies?

    Privately-held companies are owned by the company's founders, management, or private investors. Public companies are owned ...
  2. What Are Short-Term Investment Options?

    If you only have a short period of time in which to invest your money, there are several short-term investment options you ...
  3. What are leading, lagging and coincident indicators?

    Leading indicators move ahead of the economic cycle, coincident indicators move with the economy, and lagging indicators ...
  4. What are the advantages and disadvantages of buying stocks instead of bonds?

    Learn more about how stocks and bonds differ dramatically in their structures, payouts, returns and risks and discover which ...
Trading Center