Types

• The term Treasury bonds has widespread use as a general term for the different types of Treasury securities. The Treasury actually issues three main types of securities. Treasury bills are short-term securities with maturities at issue from four to 52 weeks. T-bills are sold at a discount to account for the interest rate. Treasury notes are debt securities with maturities of two to 10 years. Treasury bonds are issued with a maturity of 30 years. Notes and bonds pay a fixed rate of interest in semi-annual payments.
  
  

TIPS

• Treasury Inflation-Protected Securities -- TIPS -- are another form of government bond designed to protect investor values against inflation. TIPS bonds have their principal or face value adjusted for the rate of inflation. TIPs have a fixed interest rate, but the interest paid will increase as the face amount increases with the inflation adjustments. TIPS are issued with maturities of 5, 10 and 30 years.
  
  

Buy Direct

• The full range of Treasury securities can be purchased direct without commission through the TreasuryDirect.gov website. Investors can set up an account online and fund Treasury bond purchases by linking to a bank account. Treasury orders placed through a Treasury Direct account are filled at the average yield at the next auction of the purchased security type. A direct account may be a good choice for an investor building a buy-and-hold portfolio of Treasury bonds.
  
  

Consider ETFs

• For investors who want to actively trade in the Treasury security market, the iShares family of exchange traded funds -- ETFs -- offers a wide range of Treasury funds. IShares has eight Treasury bond or TIPS bond funds covering a range of maturities. ETF shares can be bought and sold through a regular stock brokerage account. Brokerage commissions will apply.
  
  

Marketable Securities

• The range of Treasury bonds are all marketable securities and the market price will fluctuate with changes in interest rates. Shorter-term bonds will have more stable prices but pay lower rates. Longer-term bonds usually have higher yields and more price fluctuation. In a changing interest rate environment, rising interest rates will cause bond prices to fall and declining rates will result in higher Treasury bond values.