Bond Yields
Treasury and Savings Bond Yields
| Type | Yield | Institution |
|---|---|---|
| Series I Bonds | 4.26% through October 31, 2026 | US Treasury Direct |
| 3-Month Treasury | 4.01% | Various brokerages |
| 6-Month Treasury | 4.15% | Various brokerages |
| 9-Month Treasury | 4.25% | Various brokerages |
| 1-Year Treasury | 4.33% | Various brokerages |
| 2-Year Treasury | 4.64% | Various brokerages |
| 3-Year Treasury | 4.63% | Various brokerages |
| 5-Year Treasury | 4.79% | Various brokerages |
| 10-Year Treasury | 4.97% | Various brokerages |
| 30-Year Treasury | 5.35% | Various brokerages |
Bonds are some of the most widely used investment vehicles in the world.
The international bond market is estimated at over $100 trillion and the US bond market is estimated at over $40 trillion. By comparison, the value of the Russell 3000 Index which comprises 99% of US equities is now estimated at $40 trillion.
Bonds are a form of debt, similar to an I.O.U. In return for providing a company or a government with a loan, investors receive a promise for a certain rate of return over the term of the loan as well as repayment of the loan when the term ends or it "comes due".
Bonds come in many different shapes and forms and a bond portfolio may include several different types and maturities depending on the objective of the bond holder.
US Treasuries
The safest bonds is the world are still considered to be those issued by the largest debt issuer in the world, the U.S. government. These bonds are issued as U.S. Treasury bills, notes, and bonds. Since these debt obligations are backed by the “full faith and credit” of the US government, and thus by its ability to raise tax revenues and print currency, US Treasuries are viewed in the market as having no “credit risk,” meaning that it is virtually certain your interest and principal will be paid on time.
Treasury bills mature in one-year or less. Treasury notes mature between 2-10 years while Treasury bonds, also known as long bonds, mature between 20-30 years.
The U.S. government, in the form of the FDIC and NCUA, insures deposits at U.S. banks and most credit unions. Therefor, most US-based investors have historically found that they can achieve higher rates of return through certificates of deposit (time deposits) than by investing in short-term US Treasuries with the same credit risk so long as they stay within FDIC and NCUA limits (ordinarily $250,000 per depositor per institution). However, where rates are increasing dramatically as they are in 2022, short-term US Treasuries can offer higher return than banks and credit unions.
Other Bond Resources
- Bonds for Newbies and Beginners - A newbie purchasing bonds for the first time can be a little bit like the coffee virgin at Starbucks ordering his first ever specialty drink.
- Bond Basics - Basic bond terms and what to look for when thinking about buying bonds.
- Coupon Rate, Current Yield, and Yield to Maturity Explained - Key terms to know before investing in bonds.
- Three Popular Bond Investment Strategies - There are three popular strategies for investing in bonds - the barbell, the bullet, and the laddered bond strategy.
- Laddered bond portfolios - Learn the advantages of laddering your bond portfolio and how to do it.
- Bond Funds Versus Bonds - This article explores investing in bond funds versus individual bonds.
- Bond Fund Fees Explained - No matter what anyone tells you, no matter what you may read, mutual funds are not free, and you will pay for the privilege of owning shares.
- Bearer Bonds - Bearer bonds, also known as coupon bonds that are owned by the holder of the physical certificate, rather than being a registered security like bonds are today.
