Because of their longer maturities, notes have yields that are generally higher than those on bills. Notes are suitable for investors with an intermediate to long-term investment horizon. Treasury bonds are long-term government securities with maturities extending beyond 10 years. Bonds also pay a fixed rate of semiannual interest and return the face amount of the bond at maturity. Because bonds are long-term investments, their yields are generally higher than those of both bills and notes.
Bonds offer dependable income to the investor with a long-term financial horizon.
TIPS currently pay semiannual interest and return the adjusted principal value at maturity. Most agency issues are not directly guaranteed by the federal government but do involve some level of federal sponsorship. All of their securities have an implied triple-A credit quality because of their close relationship to the government. Agency and GSE issues usually offer higher yields than Treasury obligations do because, although closely associated with the U.S. government, the issues do not carry the full faith and credit guarantee. Unlike most Treasury securities, some agency and GSE securities may be called from investors at the issuers' option before maturity.