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2810 Fieldstream Drive North

Wilson, NC 27896

 

Phone: 252-237-4357

Fax: 252-243-2681

 

May/June 2018

Notes, Bills and Bonds

Notes bills and bonds

Bonds aren’t the only type of fixed-income investing. In the world of debt instruments, bonds, bills and notes differ by their maturity, or when they pay interest.

Bonds

Bonds mature in one to 30 years. A long-term bond matures in 10 or more years, intermediate-term bonds go from four to 10 years and short-term bonds mature in one to four years. The longer the maturity, typically the higher the interest rate.
Notes

Notes maturity dates are similar to those of intermediate and short-term bonds. They typically mature in one to 10 years.
Bills

Bills mature in one year or less. They typically offer the lowest interest rate return.
Interest Rates

If you own any of these debt instruments and interest rates rise, your investment could be worth less because it has a lower interest rate. Bills, with their short terms, are considered less sensitive to interest rate changes. They turn over quickly. Conversely, long-term bonds are the most affected when rates change.


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