- Interest payments on FRNs rise and fall, based on discount rates for 13-week bills.
- FRNs are sold in increments of $100. The minimum purchase is $100.
- FRNs are issued in electronic form.
- You can hold an FRN until it matures or sell it before it matures.
- In a single auction, a bidder can buy up to $5 million in FRNs by non-competitive bidding or up to 35% of the initial offering amount by competitive bidding.
Floating-Rate Notes or FRNs provide liquidity and protection against capital risk/default risk, and interest-rate risk.