Treasury Notes — TreasuryDirect (2024)

FAQs

How do I buy Treasury notes on TreasuryDirect? ›

Go to your TreasuryDirect account. Choose the Buy Direct tab. Follow the prompts to choose the security you want, specify the amount you want to buy, and fill in the information required.

Treasury notes, backed by the U.S. government, offer a very low risk of default, making them a secure choice for risk-averse investors. CDs are also low-risk since the Federal Deposit Insurance Corp. insures them up to $250,000.

Treasury bills have the shortest maturities, up to one year, making them the best choice for short-term investment. Treasury bonds, with maturities of 20 and 30 years, suit long-term investment needs. Treasury notes, with maturities ranging from 2 to 10 years, are suitable for intermediate-term investment.

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.

Bonds are long-term securities that mature in 20 or 30 years. Notes are relatively short or medium-term securities that mature in 2, 3, 5, 7, or 10 years. Both bonds and notes pay interest every six months.

Choosing between a CD and Treasuries depends on how long of a term you want. For terms of one to six months, as well as 10 years, rates are close enough that Treasuries are the better pick. For terms of one to five years, CDs are currently paying more, and it's a large enough difference to give them the edge.

But while they are lauded for their security and reliability, potential drawbacks such as interest rate risk, low returns and inflation risk must be carefully considered. If you're interested in investing in Treasury bonds or have other questions about your portfolio, consider speaking with a financial advisor.

Security: Both CDs and Treasuries are very high-quality investments. CDs are bank deposits that pay a stated amount of interest for a specified period of time and promise to return your money on a specific date. They are federally insured and issued by banks and savings-and-loans institutions.

Interest income from Treasury bills, notes and bonds - This interest is subject to federal income tax, but is exempt from all state and local income taxes.

How much can you make on a 3 month treasury bill? ›

3 Month Treasury Bill Rate is at 5.25%, compared to 5.25% the previous market day and 4.97% last year. This is higher than the long term average of 4.19%.

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.

T-bills pay a fixed rate of interest, which can provide a stable income. However, if interest rates rise, existing T-bills fall out of favor since their return is less than the market. T-bills have interest rate risk, which means there is a risk that existing bondholders might lose out on higher rates in the future.

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.

When the bill matures, you are paid its face value. You can hold a bill until it matures or sell it before it matures.

Open a Treasury direct account

This online platform created by the U.S. Department of the Treasury allows you to purchase, manage and redeem T-bills directly from the federal government. The benefit of purchasing T-bills through TreasuryDirect is that the platform does not charge fees or commissions.

TreasuryDirect.gov is the one and only place to electronically buy and redeem U.S. Savings Bonds. We also offer electronic sales and auctions of other U.S.-backed investments to the general public, financial professionals, and state and local governments.

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 TreasuryDirect.gov. Auctions happen every four weeks for 52-week T-bills and weekly for shorter-term T-bills.

Basic Info

10 Year Treasury Rate is at 4.62%, compared to 4.62% the previous market day and 3.57% last year. This is higher than the long term average of 4.25%. The 10 Year Treasury Rate is the yield received for investing in a US government issued treasury security that has a maturity of 10 year.