Treasury securities, such as Bills, Notes and Bonds, are debt obligations of the government. Treasury securities are considered to be the safest investments in the world. They are viewed in the market as having no "credit risk", which means that your principle and interest are almost guaranteed to be paid on time. The Treasury market is the most liquid debt market in the world. Trading in the U.S. Treasury instruments occurs twenty four hours a day all over the world.

Treasury Bills (or T-Bills) are issued through a competitive bidding process at a discount from par, which means the appreciation of the bond, providing the return to a holder, rather than paying fixed interest payments like conventional Bonds.

Due to the Treasury Bills' unique degree of safety, the interest rates are lower than other types of debt instruments, and it concerns also any other liquid investment you run across. However, it does not mean that the price does not fluctuate.

For you not to think that Treasury Bills, Notes and Bonds are absolutely risk free, you should consider other but credit risks, affecting the Treasury market. An interest rate risk and an inflation risk are those, which may affect a debt instruments price. Both of those risks cause the underlying value of debt instruments to change, depending on the direction of interest rates. Like any other fixed income investment, Treasury shares' interest rates generally fall as new instruments come into the market with a higher interest rate. Conversely, if interest rates are falling, the value of the higher paying instrument will rise in comparison to the newer lower interest rate issues.

You can find Treasury Bills traded in primary and secondary markets. Originally, they are auctioned directly by the U.S. government, which is their primary market. They are subsequently traded among investors in the secondary market. These markets determine a price for each Treasury bill. Treasury bill quotes are provided either in the form of an annualized discount rate percentage, relative to the par value and a three hundred and sixty five-day year, called the Discount Yield, or as a bond equivalent yield, which is relative to the price and a three hundred and sixty five-day year.

Treasury debt securities are classified according to their maturities:

- Treasury Bills mature in one year or less.
- Treasury Notes mature in two to ten years.
- Treasury Bonds have maturities greater than ten years.

Treasury Bonds of the U.S. government are issued with a minimum denomination of one thousand. The Bonds are initially sold through an auction, in which the maximum purchase amount is five million dollars, if the bid is non-competitive or thirty five percent of the offering in case the bid is competitive. A competitive bid states the rate that a bidder is willing to accept; it will be accepted, depending on how it compares to the set rate of the bond. A non-competitive bid ensures that a bidder will get the bond, but he or she will have to accept the set rate. After the auction, Bonds can be sold in the secondary market.

U.S. Treasury Notes are issued in two, three, five and ten year maturities. The two year and five year Notes are auctioned each month, while the three year Notes are issued quarterly, and ten year Notes are auctioned six times a year. All Notes pay interest twice a year and expire at the par value.

The Treasury Bonds' advantage is that the interest is exempt from local and state taxes, but not from Federal income taxes. You cannot redeem Treasury Bonds before the maturity, and they do not have call provisions. As soon as Bonds mature, interest payments stop. Treasury Bonds are generally issued in thirty year maturities and pay interest twice a year.

You should mind that Treasury stocks are shares that once become a part of the float and shares outstanding, but subsequently are repurchased by a company and decommissioned. These stocks do not have voting rights and do not pay any distributions. A company can decide to hold onto Treasury stocks indefinitely, reissue them to the public or even cancel them.