Home     About Us    Contact Us     Contribute     Privacy
Mutual Funds
Related Articles
Related Definitions
Related Categories
Tip of the Day

Tip of the Day Get The House Inspected by a Professional

Get The House Inspected by a Professional - So you have decided to purchase a home for the first time, or the fifth time, and you love the home you...

read entire tip

Related Podcasts
Recently Added
Other Great Sites

Indexed Treasury Bonds

Indexed treasury bonds, also known as inflation-indexed treasury bonds, came about because Congress wanted the U.S. Treasury Department to issue out some of its debt in the form of a bond. These bonds were given to individuals and were designed to cut out the rate of inflation on an investment. With an inflation indexed treasury bond, both the investor and the one who issued the bond are both protected from the rising cost of inflation for the duration of the bond. Unlike other types of bonds, the interest and maturity value of an indexed treasury bond are adjusted by the rate of inflation during the bond's term. This keeps the bond's value current with inflation and is thus less risky for conservative investors.

Indexed treasury bonds were introduced by the U.S. Treasury in January of 1997. They are bought at face value and have a maturity of varying years, although the most common is ten years. There are also no fees associated with indexed treasury bonds. Like regular conventional bonds, also called nominal bonds, indexed bonds pay interest at fixed intervals. The main difference between indexed treasury bonds and more conventional bonds is that payments on conventional bonds are set in nominal dollars. Indexed bonds are set in real terms using the current inflation rate. This is why conventional bonds put investors at risk due to inflation.

Taxes on indexed treasury bonds are not paid until the bond reaches maturity and is redeemed. So until that time comes, the tax on both the interest and the principle can be deferred. Even after the bond is cashed out, you can still get a break on the taxes if the bond was used for educational purposes. The indexed bonds are best for investors who are conservative and do not like to risk their money on the ups and downs of the stock market nor want their principle value to be reduced by inflation. The problem, however, is that while the bond's principle amount is indexed to the rate of inflation, a tax must be paid for every dollar of inflation that the bond is not subject to. So in the end, investors might actually be paying twice the amount of tax as a conventional bond.

Discuss It!||| said:

The problem, however, is that while the bond's principle amount is indexed to the rate of inflation, a tax must be paid for every dollar of inflation that the bond is not subject to. So in the end, investors might actually be paying twice the amount of tax as a conventional bond.

richestcelebrities.org said:

Keep up the impressive work.I was to an extraordinary degree spurred by this post, this site has dependably been dazzling news

Homepage said:

Your use of sorting out while picking your concentrations makes your target affirmations clear and direct It's difficult to find splendid confined work like yours nowadays.

https://www.youtube.com/watch?v=9c9u3wmkzdE said:

I couldn't find any data on this matter past to.Also work a site and if you are ever enthused about doing a couple.

Rex Rowland said:

Moreover, whatever number new articles about this as could be standard in light of the present condition.

manabadi 10th results 2017 said:

Excellent information on your site, thank you for putting aside a perfect chance to oblige us.

manabadi ssc results 2017 said:

This was really an interesting topic and I kinda agree with what you have mentioned here

Zeal Cleanse review said:

I saw looking post and watched it to be central and to the subject. Much appreciation to you for not turning unendingly just to fill the page.

https://www.youtube.com/watch?v=Q1sBuZkEdLU said:

Truly I read it yesterday regardless I had a couple of examinations about it and today I expected that would investigate it again in light of the way that it is astoundingly well written.

ap ration card download said:

This article is really the best. Along these lines, I may require you that you continue proceeding with your work on this article.

free tour stockholm said:

I starting late went toward the day's end your web diary and have been looking. I thought I would leave my first comment.

getessaynow.com said:

I tell this is the squeezing spot where I discover issues I've been scanning for after down.

Bajuband sale online said:

This article is more helpful ti us.thanks for shearing this.

get followers on instagram | get likes said:

Utilize the different applications accessible in the market to sensationalize their impact and create a practically picture culminate photograph.

swalife.com said:

or the Medical coverage plan amount from an employee is deducted every month as per the plan opted by the employee.

Most Popular Articles
Most Popular Definitions
Daily Definition

Definition of the Day Optionable Stock

Optionable Stock - Optionable Stock is a stock certificate that has options trading on a market exchange. Not all corporations that trade publicly have exchange-traded options; this is due to requirements that need, such as minimum shares of stock price and minimum outstanding shares. This allows stock shareholders to buy...

read entire definition




Home     About Us    Contact Us     Contribute     Sitemap


Copyright © 2009 TeenAnalyst.com