Government Securities: What You Need to Know About Treasury Notes and Debentures

Government securities are financial instruments issued by governments to raise funds from institutional and individual investors for financing purposes. 

These securities allow Government to borrow money for infrastructural projects, social programmes, and other expenses.

In return, investors benefit from rates of returns that are typically above those offered by a regular savings account.

Government securities include short term securities such as Treasury Bills and medium- and long-term securities such as Treasury Notes and Debentures. 

In this article, we discuss Treasury Notes and Debentures.What Are Treasury Notes and Debentures?

What Are Treasury Notes and Debentures?

Treasury Notes and Debentures are fixed income instruments which the Central Bank of Barbados issues on behalf of Government Treasury Notes and Debentures work in the same way but Treasury Notes have maturities ranging from one to 10 years, while Debentures have maturities in excess of 10 years.

How Do Treasury Notes and Debentures Work?

Treasury Notes and Debentures are sold at face value, and individuals and institutional investors may purchase them in increments of $1,000, with a minimum investment of $1,000.  The interest rate varies from issue to issue and may be payable either quarterly or semi-annually.

Treasury Notes and Debentures are transferable and investors can sell them prior to maturity, through a broker, if they need cash. 

Who Should Invest in Treasury Notes and Debentures?

Individual investors who want a steady flow of interest over the medium to long term may find Treasury Notes and Debentures an attractive option. They may also be suitable for people who don’t have immediate liquidity needs and are seeking a low-risk investment.

How Can I Get Treasury Notes and Debentures?

Currently, there are no open issues of Treasury Notes or Debentures. We will publish the details on our website when Government offers them again.

Visit our MoneySmart hub for more articles, videos, and tips on how to secure your finances. Have a specific question you’d like answered? Submit it and it could be answered in our Ask the Expert column.