federal agency bond

Definition

Bond issued by a government-backed agency, with a maturity period from 1 to 40 years. Such agencies include Export Import Bank of the United States, Farmers Home Administration, Federal Housing Administration (FHA), Federal National Mortgage Association (Fannie Mae), Government National Mortgage Association (Ginnie Mae), and United States Postal Service. It is a very safe investment, having an interest income of around 7 percent which is subject to federal and state income taxes. Except for the bonds issued by Fannie Mae and Ginnie Mae, a capital gains tax is applicable if the bond is sold for profit after holding for at least one year.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Federal Accounting Standards federal agency securities