Treasury Bond Calculator
Calculate returns, prices, and yields for US Treasury securities including bonds, notes, and bills. Treasury securities are considered the safest investments available and serve as benchmarks for other fixed income investments.
Treasury Bond Results
Bond Analysis
Current Treasury Yields (2024)
3-Month T-Bill: 5.2%
1-Year T-Note: 4.8%
10-Year T-Note: 4.2%
30-Year T-Bond: 4.4%
Note: Rates change daily
Understanding Treasury Securities
US Treasury securities are debt instruments issued by the US Department of the Treasury to finance government operations. They are considered the safest investments in the world because they are backed by the full faith and credit of the US government.
Types of Treasury Securities
| Security Type | Maturity | Interest Payments | Face Value |
|---|---|---|---|
| Treasury Bills (T-Bills) | 4, 8, 13, 26, 52 weeks | None (discount) | $100 minimum |
| Treasury Notes (T-Notes) | 2, 3, 5, 7, 10 years | Semi-annual | $100 minimum |
| Treasury Bonds (T-Bonds) | 20, 30 years | Semi-annual | $100 minimum |
| TIPS | 5, 10, 30 years | Semi-annual (inflation-adjusted) | $100 minimum |
Bond Pricing Formula
The price of a coupon bond is the present value of all future cash flows:
P = C × [1 - (1 + r)^(-n)]/r + F × (1 + r)^(-n)
Where: P = price, C = coupon payment, r = yield, n = periods, F = face value
Yield to Maturity (YTM)
YTM is the total return anticipated on a bond if held until maturity. It represents the discount rate that makes the present value of all future cash flows equal to the bond's current price.
- Current Yield: Annual coupon payment divided by current price
- YTM: Includes both coupon payments and capital gain/loss
- Real Yield: YTM adjusted for inflation (TIPS)
- Nominal Yield: Stated YTM without inflation adjustment
Duration and Convexity
Duration measures a bond's sensitivity to interest rate changes. Longer duration means greater price volatility.
- Macaulay Duration: Weighted average time to receive cash flows
- Modified Duration: Macaulay duration adjusted for yield
- Effective Duration: For bonds with embedded options
- Convexity: Measures the curvature of the price-yield relationship
Treasury Yield Curve
The Treasury yield curve shows yields across different maturities. It provides insights into market expectations for economic growth and inflation.
- Normal Curve: Longer maturities have higher yields
- Inverted Curve: Shorter maturities have higher yields (recession signal)
- Flat Curve: Similar yields across maturities
- Steep Curve: Large difference between short and long yields
Investment Considerations
- Safety: Backed by US government (no default risk)
- Liquidity: Highly liquid secondary market
- Tax Advantages: Federal interest income exempt from state taxes
- Inflation Protection: TIPS adjust principal for inflation
- Interest Rate Risk: Bond prices fall when rates rise
Current Treasury Yields
As of 2024, Treasury yields reflect the Federal Reserve's monetary policy and market expectations:
- Short-term (T-Bills): 5.0-5.5% - influenced by Fed funds rate
- Intermediate (2-10 years): 4.0-4.8% - economic growth expectations
- Long-term (20-30 years): 4.2-4.6% - long-term inflation expectations
- TIPS Spread: -0.5% to +0.5% - market inflation expectations
Tip: Treasury securities are ideal for conservative investors seeking safety and liquidity. Use them as benchmarks for other fixed income investments and as building blocks for diversified portfolios. Consider laddering maturities to manage interest rate risk.