How to Purchase Government Securities

With the economy in its current fragile state, many people are looking for safe investments. U.S. Treasury bonds are considered to be among the safest investments; barring catastrophic failure of the U.S. Government, your money will still be there when you need to get it.

Buying government bonds can be a daunting experience. In years past, you would have to physically walk to a bank or even the post office. The post office no longer sells treasury bonds but, with the advent of the treasurydirect.gov website you can now purchase treasuries online.

Treasurydirect.gov is a website run by the federal government (the Treasury Department) that allows individuals to purchase bonds quickly and easily. Treasurydirect.gov allows individuals to buy bonds through several mechanisms, the simplest of which is the online TreasuryDirect program. One interesting aspect to purchasing treasuries directly online from treasurydirect.gov through the TreasuryDirect program is that the transaction and the securities are entirely paperless. Setting up an account is simple and the website offers a guided tour to help you get everything started.

There is another way to purchase U.S. Government bonds, however it's only available to those who work for the federal government. There are nearly two million federal employees-many of whom are eligible to contribute to the Thrift Savings Plan (TSP). The TSP offers contributors the option of saving for retirement in several different funds, one of which is the G fund. The G fund is a supercharged version of U.S. Treasury Securities. The interest rate is reset monthly based on a weighted average of long and short-term treasury securities.

It would be difficult to find a better deal-an interest rate that consistently and significantly exceeds the 3-month T-Bill rate with virtually no term. Additionally, the money in your TSP account can be accessed at any time via a TSP loan with no withdrawal penalty.

In conclusion, U.S. Treasury Bonds are considered to be an extremely safe investment. The treasurydirect.gov website makes it easy to purchase traditional government bonds. For federal employees, an even better alternative is to use the G fund which allows for better interest rates, employee matching contributions and TSP loans.