How to Buy Treasury Bonds, Notes and Bills - NerdWallet (2024)

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Treasurys are low-risk securities issued by the U.S. government that pay a fixed rate of interest. As a Treasury bond, note or bill investor, you essentially make a loan to the government, and it pays you back with interest over time.

Here are some Treasury bond basics:

  • They're issued in 20- or 30-year terms.

  • They can be purchased in increments of $100.

  • Treasury bonds pay interest semiannually (every six months) until the end of the term.

  • They're low-risk, long-term investments guaranteed by the U.S. government.

The current rate for 20-year and 30-year bonds is 4.75%.

Treasury notes and bills are shorter-term U.S. government bonds. Treasury notes mature in two to 10 years and Treasury bills in four weeks to a year.

» Learn more: What are Treasury bonds?

Where to buy Treasury bonds, notes or bills

While you can buy Treasurys like T-bonds directly from the source — the U.S. government — one of the most common ways people add them to their portfolio is by investing in Treasury exchange-traded funds or mutual funds through bank, brokerage or retirement accounts. There is no difference between the Treasury bonds, notes and bills in terms of where to buy them – all can be bought through brokerage accounts or TreasuryDirect.

From a broker or a bank

Exchange-traded funds and mutual funds are ways to buy government bonds in bulk on a brokerage platform. An exchange-traded fund, or ETF, is a basket of investments — such as stocks or bonds — from which you can buy as many or as few shares as you like. Treasury ETFs invest in U.S. Treasury securities, and they are low-cost investments that can be bought and sold like any ETF. Like ETFs, mutual funds are another way investors pool resources in order to get exposure to many securities without having to purchase or manage them.

» View our picks for the best brokers for ETFs

According to Nicholas Juhle, a certified financial analyst and chief investment officer at Greenleaf Trust, ETFs and mutual fundsoffer the convenience of owning a number of Treasury bonds that mature at different times and having them managed for you.

“There's a system in place. When the bonds mature, they're rolling that back into new Treasurys for you all the time,” he says.

To understand what the ETF or mutual fund you’re interested in contains, Juhle recommends checking its prospectus.

“Each ETF or mutual fund is going to have a prospectus that describes exactly what can and cannot be held,” Juhle says. For example, this might include whether the fund holds 80% T-bonds or 100% T-bonds.

» See how much bonds could be worth with our bond calculators

Top 5 Treasury ETFs by AUM


Treasury ETF

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iShares 20+ Year Treasury Bond ETF



SPDR Bloomberg 1-3 Month T-Bill ETF



iShares 7-10 Year Treasury Bond ETF



iShares 1-3 Year Treasury Bond ETF



iShares U.S. Treasury Bond ETF


» Learn more: What is an ETF?

Directly from the U.S. government through the TreasuryDirect website

If you want to bypass brokerages and buy direct from the government, be sure you have these three pieces of information handy if you do: a taxpayer identification number or Social Security number, a U.S. address, and a checking or savings account to link for payment.

Here's how to buy government bonds from TreasuryDirect:

  1. Go to (or skip to step five if you already have an account).

  2. Choose the type of account you’re selecting: an individual account, business or organizational account, or estate and trust account.

  3. Provide personal information including: a taxpayer identification number, or TIN; a U.S. address; and a bank account.

  4. Create a password and username to open a TreasuryDirect account.

  5. Once your account has been confirmed, open the account and select the Buy Direct tab.

  6. Specify the security you want — in this case Treasury bonds — and the amount you want to buy.

  7. Select buy.

When the bond matures, the yield lands directly and automatically in your account.


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Important Treasury Bond Terms

Key terms

Definitions and examples

Annual coupon payment

The total investment interest payment over the course of 1 year.

Coupon payment frequency

How often investment interest payments are made. T-bond coupon payments pay every 6 months until maturity.

Discount price

The price of the bond if it falls below face value.

Face value

The price of the bond if held to maturity.

Interest rate

The amount a lender charges a borrower to loan them money. The interest rates for T-bonds as of December 2023 were around 4%.


What investors will pay for a (Treasury) bond, which is affected by the economic environment.

Years to maturity

T-bonds mature in 20 or 30 years.

Yield to maturity

The total investment return if a bond is held to maturity.

» Ready to get started? Check out our list of the best online brokers for beginners.

How to Buy Treasury Bonds, Notes and Bills - NerdWallet (2024)


How to Buy Treasury Bonds, Notes and Bills - NerdWallet? ›

Treasury bonds, notes and bills are low-risk investments issued by the U.S. government. You can buy them from the government directly, and many buy them through a brokerage, retirement or bank account.

How do I buy Treasury bills notes and bonds? ›

Individuals, organizations, fiduciaries, and corporate investors may buy Treasury securities through a bank, broker, or dealer. With a bank, broker, or dealer, you may bid for Treasury marketable securities non-competitively or competitively, but not both, for the same auction.

Is it better to buy Treasury bills or notes? ›

If you'll need the money sooner, a Treasury bill with a shorter maturity might be best. If you have a longer time horizon, Treasury notes with maturities of up to 10 years might be better. Typically, the longer the maturity, the higher your return on investment.

How much does a $1000 T bill cost? ›

To calculate the price, take 180 days and multiply by 1.5 to get 270. Then, divide by 360 to get 0.75, and subtract 100 minus 0.75. The answer is 99.25. Because you're buying a $1,000 Treasury bill instead of one for $100, multiply 99.25 by 10 to get the final price of $992.50.

What is the best way to buy two year Treasury notes? ›

Treasury bills mature in less than one year, Treasury notes in two to five years and Treasury bonds in 20 or 30 years. The easiest ways to buy Treasury bonds, notes and bills are directly from the U.S. government at or through a broker.

How to buy Treasury bills for dummies? ›

For newly issued T-bills, the minimum purchase is $100 and the securities are sold in increments of $100. New issues are sold at auction, and to participate, you must sign up with your broker or at Auctions happen every four weeks for 52-week T-bills and weekly for shorter-term T-bills.

Can I buy Treasury bills myself? ›

You can buy them from the government directly, and many buy them through a brokerage, retirement or bank account. Treasury owners pay federal taxes on the investment interest earned but no state or local taxes.

Why not to buy Treasury bills? ›

Taxes: Treasury bills are exempt from state and local taxes but still subject to federal income taxes. That makes them less attractive holdings for taxable accounts. Investors in higher tax brackets might want to consider short-term municipal securities instead.

What is the disadvantage of investing in Treasury bills? ›

T-bills are issued with maturities of only a few weeks to a few months. This means that investors looking for longer-term investments may need alternative options. If interest rates rise, the value of T-bills will decline, resulting in a potential loss for investors who need to sell their holdings before maturity.

Can Treasury bills lose value? ›

The federal government has never defaulted on an obligation, and it's universally believed it never will. Investors who hold T-bills can rest assured that they will not lose their investment. T-Bills are considered a zero-risk investment thanks also to Treasury market liquidity.

Which is better, T-bills or CDs? ›

T-bills have a key advantage over CDs: They're exempt from state income taxes. The same is true with Treasury notes and Treasury bonds. If you live in a state with income taxes, and rates are similar for CDs and T-bills, then it makes sense to go with a T-bill.

How much is a $100 savings bond worth after 20 years? ›

How to get the most value from your savings bonds
Face ValuePurchase Amount20-Year Value (Purchased May 2000)
$50 Bond$100$109.52
$100 Bond$200$219.04
$500 Bond$400$547.60
$1,000 Bond$800$1,095.20

What is a 1 year T-bill paying today? ›

Basic Info. 1 Year Treasury Rate is at 5.17%, compared to 5.14% the previous market day and 4.60% last year.

Do banks charge to buy T-bills? ›

When you buy T-bills through your bank, it may charge you additional fees and expenses such as sales commissions or transaction charges. These extra costs can add up over time and eat into your returns on your investment.

What is the best way to buy Treasury notes? ›

One of the most common ways to purchase Treasury bills is through a bank. Banks usually offer an array of T-bill products with varying maturities and yields, allowing you to choose the one that best suits your investment needs.

How do treasury notes work for dummies? ›

We sell Treasury Notes for a term of 2, 3, 5, 7, or 10 years. Notes pay a fixed rate of interest every six months until they mature. You can hold a note until it matures or sell it before it matures.

What is the best way to buy treasury bills? ›

One of the most common ways to purchase Treasury bills is through a bank. Banks usually offer an array of T-bill products with varying maturities and yields, allowing you to choose the one that best suits your investment needs.

What is the 1 year T-bill rate? ›

1 Year Treasury Rate is at 5.14%, compared to 5.16% the previous market day and 4.76% last year. This is higher than the long term average of 2.95%.

What is the current T-bill rate? ›

3 Month Treasury Bill Rate is at 5.25%, compared to 5.25% the previous market day and 4.97% last year.

What is the 6 month Treasury bill rate? ›

6 Month Treasury Rate is at 5.39%, compared to 5.39% the previous market day and 5.06% last year. This is higher than the long term average of 2.83%.


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