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What are government securities?

Any debt instruments that are issued by a sovereign government are considered government securities. Basically, the government issues these debt securities to fund operations of the government and provide guaranteed returns to individuals that hold the securities. Examples include:

Government securities are considered risk-free as the government guarantees payment, which means there is no default risk. Additionally, the interest rate is typically guaranteed.

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  • What are examples of debt securities?

    A debt security is any security that is representing a creditor relationship with an outside entity. Examples of debt securities include corporate bonds, redeemable preferred stock, commercial paper, convertible debt, and government securities.

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