20-Year Treasury Bond Calculator
Here’s a comprehensive table summarizing key information about the 20-Year Treasury Bond:
| Feature | Details |
|---|---|
| Issuer | U.S. Department of the Treasury |
| Maturity | 20 years |
| Type of Security | Fixed-rate bond |
| Interest Payments | Semiannual (every 6 months) |
| Coupon Rate | Varies; determined at auction |
| Yield | Current yield fluctuates based on market conditions |
| Face Value | Typically $1,000 (but can be purchased at any amount) |
| Purchase Method | Directly through TreasuryDirect or via brokers |
| Market Trading | Tradable on secondary markets |
| Credit Quality | Backed by the full faith and credit of the U.S. government |
| Taxation | Exempt from state and local taxes; federal tax applies |
| Inflation Protection | No built-in protection; consider TIPS for inflation protection |
| Liquidity | Generally high due to active trading in the market |
| Investment Strategy | Suitable for long-term investors seeking steady income |
| Risks | Interest rate risk, inflation risk, opportunity cost |
| Use in Portfolio | Diversification, fixed income allocation |
| Historical Performance | Generally lower yields compared to stocks, but stable |
Key Points:
- Interest Rate Risk: As interest rates rise, the price of existing bonds typically falls.
- Inflation Risk: The fixed interest payments may lose purchasing power in an inflationary environment.
- Diversification: Including Treasury bonds in a portfolio can provide stability and income, especially during market downturns.