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What are U.S. Treasury Notes?

April 26, 2017notes Treasury treasury notes

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What are U.S. Treasury Notes?

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What are U.S. Treasury Notes?Answer: Treasury Notes have maturities of 2, 3, 5 or 10 years and denominations of $1,000. The U.S. Treasury sells Notes at public auction periodically. You bid for the Note by placing a competitive bid or a non-competitive bid. In the wonderful world of government logic, a noncompetitive bid guarantees you will get the Note. If you issue a competitive bid, you may or may not get the Note. Makes sense, right? The interest rate for the Note is set at the auction. A competitive bid states what interest rate you will accept. If that happens to be the rate set at the auction, you get the Note. If not, you don t get the note. A noncompetitive bid states you will accept whatever rate is set at the auction. This guarantees you will get the Note (assuming the auction is not oversubscribed).