What Is a Treasury Note? A Treasury note is a type of federal debt security issued by the U.S. government with a maturity of not more than 10 years. The U.S. Treasury issues a variety of debt securities, such as Treasury notes, Treasury bonds, and Treasury bills. Treasury notes, the shortest-term of the family, mature in two, three, five, or 10 years. Why Would Someone Invest In a Treasury Note? Treasury notes are appealing to investors because they offer relative safety and low interest rates. They also offer more income than other investment choices, such as CDs or money market funds. The U.S. government guarantees the principal amount and interest rate, making it one of the safest investments available. Treasury notes can also be easily traded on the secondary market. Risk and Rewards Although Treasury notes offer relative safety when compared to other investments, there are still risks involved. The primary risk is inflation risk, which means that the rate of the rate of inflation could outpace the return on the notes. Additionally, since Treasury notes are sold on the open market, their values are subject to fluctuation based on market forces. Despite the risks, the return on Treasury notes can be attractive. They typically offer higher yields than other investments with similar levels of safety. This makes them a good choice for investors who want to invest with a low level of risk but still earn some income. Conclusion Treasury notes are an attractive investment option for conservative investors who value safety and relative liquidity. They offer higher yields than many other investments and are backed by the U.S. government. Although there are risks involved, such as inflation risk and market risk, the return offered by Treasury notes can be attractive. As always, it is important for investors to do their research and consider their individual needs before investing in any type of security.