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Government Securities


A bond issued by a government authority, with a promise of repayment upon maturity. A low-risk investment backed by taxing power of the government.


What are Government Securities?

US government securities are bonds issued by the government and repaid upon the maturity date.  Securities such as treasury bills, savings bonds, and notes also offer a periodic coupon or interest payments throughout the term.  Because the taxing power of the government is so strong, government securities are typically considered low risk investments because the securities are backed by the credit of the US government.  These securities are issued throughout the Treasury Department to institutional investors.


Government bonds are liquid, but also have lower rates of return compared to other bonds. Interest paid by government bonds is tax exempt at the state and local level.  A popular option for investors is to hold government bonds through mutual funds, which help investors diversify their portfolio without having to invest as much money.


How to Buy Government Securities

Investors are encouraged to do adequate research or contact a broker/financial advisor, attorney or CPA to determine if government securities are an appropriate investment. Once you have determined that a government security is suitable for you, it can be purchased with your Self-Directed IRA or other retirement accounts at Mainstar Trust. Click here to find out how to invest in Government Securities with a Mainstar Trust account.