Government issued securities are debt certificates that the government issues in exchange for
currency that can be used to fund various projects if revenues from taxes cannot cover it. Government issued securities are safe due to the fact that the government can generate revenues just by raising taxes or other government related fees. However, this measure is not generally recommended since it contributes to inflation.
Issuing bonds is also a way that the government can increase the monetary base and ultimately a major inflationary factor. No matter how safe looking government bonds are, they are still subject to risks of non payment when the government defaults on its debt and cannot keep up with high rates of inflation generated by constant expansion of the monetary base by borrowing. Russia has defaulted on its debt several times in its history and any bonds issued by the country would feature a low category rating. When trading U.S bonds in general, investors get investment grade ratings from Moody's, S&P and Fitch.
Treasury bills -No interest payments until maturity date
-Matures in less than 1 year
-Sold at a discount of the par value
Treasury bonds -Pays coupon every six months
-Maturity date of over 100 years
Saving Bonds -Compounded interest payments
-Interest payments are received only at the rime of redemption
Treasury notes -Pays coupon every 6 months
-Has a maturity date from 2 to 10 years
-Issued in $1,000 to a million
Tips -Adjustable principal to minimize the effects of inflation
-Has a fixed coupon rate and pays every 6 months
-Principal is based on the consumer price index