There are two ways to make money with debt securities: by holding them and collecting the interest income they earn until they mature, or by selling them at a profit to another investor. As with other debt securities, you can take advantage of Treasuries’ predictable income payments and range of maturity dates to invest for financial goals with a specific time frame, such as the down payment on a home or a tuition bill that will be due.

Treasuries are highly liquid investments. New issues become available on regular schedules, and there is an enormous market of buyers and sellers who trade existing securities at high volume every day. That means that Treasuries are easy to buy and sell and the costs of trading them are usually fairly low. This liquidity is particularly important if you need to sell an investment quickly—for example if you need cash for an emergency or an important purchase, if you spot another investment opportunity that’s a better fit for your financial plan, or if you want to trade these securities for profit.

Treasuries also have tax advantages. While you still have to pay federal income taxes at your regular rate on the interest you receive, those payments are exempt from state and local income taxes.