Frequently Asked Questions on Government Securities
Investing in government securities is a safer investment than investing in risky markets as it is guaranteed by the government. Consider investing in government securities when its interest rates are higher than the rate on your savings account or certificates of deposits at your commercial bank. What’s more, the interest income derived from investments in government securities is tax free.
There are three types of government securities offered for investment: treasury bills, treasury notes, and treasury bonds. The difference between a bill, note, or bond is the duration of the loan. The bill is a short-term loan (not more than one year). Notes are a medium-term loan (1-20 years). Bonds are long-term loans (over 10 years).