Why does the government sell investments such as savings bonds and Treasury bills?
The government sells securities to the public to raise money to run the federal government and pay its debts. When you buy treasury securities you are making a loan to the federal government. Are government securities a safe investment? Yes. Treasury securities are safe and secure investments because the U.S. government guarantees that interest and principal payments will be paid on time. What are U.S. savings bonds? Savings bonds are U.S. Treasury securities that can be purchased in denominations ranging from $50 to $10,000. Interest income is subject to federal income tax but not state or local income taxes. You can defer paying federal income tax on the interest until you cash in the bonds. You buy savings bonds at a discount (a percentage of their value at maturity). Interest varies, but you are always guaranteed a minimum return. Savings bonds are payable only to the person to whom they are registered. They earn interest for up to 30 years, but after one year from their issue date
