About 98 percent of the approximately $5 trillion in outstanding Treasury debt is made up not of savings bonds but of marketable (tradable) securities known as bills, notes, and bonds.
Technically, bills, notes, and bonds are all bonds. They are all backed by the full faith and credit of the U.S. government. They are all issued electronically (you don’t get a fancy piece of paper as you do with savings bonds). They can all be purchased either directly from the Treasury or through a broker. They can all trade like hotcakes.
The major difference among them is the time you need to wait to collect your principal:
Treasury bills have maturities of a year or less.
Treasury notes are issued with maturities from two to ten years.
Treasury bonds are long-term investments that have maturities of 10 to 30 years from their issue date.
The bills, like savings bonds, are sold at a discount from their face value. You get the full amount when the bill matures. The notes and bonds, on the other hand, are sold at their face value, have a fixed interest rate, and kick off interest payments once every six months. The minimum denomination for all three is $1,000, and you can buy them all in any increment of $1,000.
Keep in mind that you don’t have to hold any of these securities (bills, notes, or bonds) till maturity. You can, in fact, cash out at any point. The longer until the maturity of the bond, however, the more its price can fluctuate and, therefore, the more you risk losing money.
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Source:http://www.dummies.com/how-to/content/what-are-treasury-bills-notes-and-bonds-all-about.html
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