Yields are usually higher than that paid for savings bonds. Interest earned is not subject to state or local taxes, but federal income tax must be paid. Treasury securities can be sold at any time in a secondary market, but their value rises and falls throughout the time before they mature. Government Agency Securities . Government agencies also issue notes and bonds.
Interest paid is generally higher than that paid for treasury securities.
Bought from a financial institution or broker, these securities are issued by agencies such as Tennessee Valley Authority, Federal Home Loan Banks, Federal Land Banks, and the Federal National Mortgage Association. The second type of investment alternatives include money markets and tax-exempt bonds. They have slightly more investment risk and slightly less purchasing power risk than the first group. Tax-Exempt Bonds Money Markets . Available from financial institutions, money markets give the smaller investor the opportunity to get in on treasury securities.