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What is a floating rate note (FRN)?

Floating Rate Notes (FRNs) are relatively short-term investments that: You can hold an FRN until it matures or sell it before it matures. The rate varies. See How we calculate the floating interest rate further down this page. (See Buying a Treasury marketable security for information on types of bids.) See the Auction Calendar for specific dates.

What are floating-rate notes?

The U.S. Treasury Department began issuing floating-rate notes in 2014. The notes have the following characteristics and requirements: A floating-rate note (FRN) is a bond with a variable interest rate that allows investors to benefit from rising interest rates.

Are floating rate notes a good investment?

FRNs can be a suitable choice during periods of inflation, as their interest payments adjust with rising interest rates, potentially offering protection against eroding purchasing power. Floating Rate Notes (FRNs) are debt securities with variable interest rates.

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