US Treasury securities

T-bills
· maturity of less than 12 months, no coupon rate, issued at a discount to par value, mature at par value.

T-notes
· maturity of 1 to 10 years, semi-annual coupon

T-bonds
· maturity of greater than 10 years, semi-annual coupon.

Treasury Inflation Protected Securities (TIPS)
· Issued as notes or bonds and help to protect the investor against inflation risk
· The inflation reflected through upward adjustments to the principal value of the bond. At maturity, get greater of initial par or the inflation adjusted principal. But due to the IRS taxes, TIPS fail to povide perfect inflation protection

Adjusted principal = Principal x (1 + Annual inflation / 2)

Coupon = Adjusted principal at end of period x Coupon rate / 2