T-NOTE
Back to GlossaryDefinition
A U.S. government debt security with a fixed interest rate and a maturity between one and 10 years.
Summary
A T-Note (Treasury Note) is a medium-term debt security issued by the U.S. government with maturities ranging from 2 to 10 years. Unlike Treasury bills which are sold at a discount, T-Notes pay interest (coupon payments) semi-annually and return the principal at maturity. They are considered one of the safest investments because they are backed by the full faith and credit of the U.S. government.
Usage Context
Understanding T-Notes is crucial when studying government finance, bond markets, monetary policy, investment strategies, and portfolio management. They serve as benchmarks for other interest rates and are fundamental to understanding how governments finance operations.
Common Confusions
- Confusing T-Notes with T-Bills (T-Bills don't pay periodic interest)
- Mixing up maturity ranges (T-Notes are 2-10 years, not longer)
- Not understanding that T-Note prices move inversely to interest rates
- Thinking all Treasury securities work the same way
- Confusing coupon rate with current yield
