Thursday 23 February 2012

How to invest in government securities

There are several types of government securities available for investment, they are available in primary markets and secondary markets and each one of them is used by different kind of investors;
EXAMPLE OF GOVERNMENT SECURITIES
1.TREASURY BILLS
this kind of bonds are the shortest government security available.there are no interest payment during the life time of the bond,interest are only received at the end.This is the avenue for your short time investment.
2.ZERO COUPON BONDS
coupon bond operates in the same manner as treasury bills, the payment of interest is made at end of the life time of bond.the only difference is that treasury bills as a shortest life time.
3.TREASURY BONDS
it as a maturity period of one year, the payment are made every six months.many economist use this bond to measure the performance of given country.when the demand is high then that economy is performing well but when demand is low it means that the economy is not in good shape
4.TREASURY NOTE
the maturity period of this bond start after ten years and onwards.this bond is usually used by pension and insurance companies.it is usually good for individual or organization that are looking for long term investment,payment are made after every six months.