How to Buy Treasury Bonds, Bills and Notes

How to invest in Treasury bonds comes down to choosing a route: bid at a government auction through a TreasuryDirect account, buy through a bank or brokerage account, or hold Treasuries indirectly through a fund. Treasury bonds, bills and notes are loans to the US government, sold from $100 and backed by the full faith and credit of the United States.

This guide explains the different Treasury securities, how buying works on each route, how they're taxed, and the risks that still apply. It's education, not advice. If you're new to investing, our guide on how to start investing shows where safer assets like these fit next to stocks and funds.

What are Treasury bills, notes, bonds, TIPS and I bonds?

They're all IOUs from the US Treasury; the difference is how long they last and how they pay you. Bills, notes, bonds, TIPS and floating rate notes (FRNs) are "marketable", meaning they can be sold before maturity. Savings bonds such as I bonds are not.

Two details beginners often miss:

• Bills don't pay interest along the way. TreasuryDirect explains that for bills, the "interest" is the difference between the price you pay and the face value you receive at maturity.
• TIPS adjust the principal, not just the payment. At maturity you get the inflation-adjusted principal or the original amount, whichever is greater.

For a refresher on bonds in general, see our explainer on stocks vs ETFs vs bonds.

How do you buy Treasuries on TreasuryDirect?

You open a free account on TreasuryDirect.gov, choose a security, and place a non-competitive bid before the auction. You then pay whatever rate the auction sets.

To open an individual account, TreasuryDirect requires a Social Security number, a US address of record, a US bank account that accepts electronic debits and credits, an email address, and that you're 18 or older.

The buying process:

1. Log in and open the Buy Direct tab.
2. Pick the security and term, such as a 26-week bill or a 5-year note.
3. Enter the amount: from $100, in $100 increments, up to $10 million per non-competitive bid.
4. Wait for the auction. You won't know the rate when you bid. Results show in your account after 5 PM Eastern time on auction day.
5. Make sure the money is in your bank account before the issue date.

You can also schedule reinvestments, using the proceeds of a maturing bill to buy the next one automatically.

The main drawback is getting out early. TreasuryDirect says you must hold new marketable securities for at least 45 calendar days before transferring or selling them, and that selling requires a bank, broker or dealer. That means a 4-week bill bought there can't be sold before it matures.

Can you buy Treasury bonds through a broker instead?

Yes. Banks, brokers and dealers can place auction bids for you, and most brokerage accounts also let you buy existing Treasuries on the secondary market.

Broker access is often the more flexible route if you might need the money before maturity, or if you want Treasuries inside an IRA. If you don't have an account yet, see how to open a brokerage account.

How do I bonds work, and how do you buy them?

I bonds are inflation-linked savings bonds bought only through TreasuryDirect. Since the start of 2025, TreasuryDirect has sold them electronically only.

The key rules, as of 2026:

• Rate: 4.26% for bonds issued from May 1, 2026 to October 31, 2026, including a 0.90% fixed rate that lasts for the life of the bond. The inflation part resets every six months.
• Amount: from $25, to the penny, up to $10,000 in electronic I bonds per Social Security number per calendar year.
• Lock-up: you can't cash them in during the first 12 months.
• Early penalty: cash in before five years and you lose the last three months of interest.

Our full guide to I bonds, their rates and purchase limits covers how the rate is calculated, gifting and taxes in more detail. That lock-up makes I bonds a poor home for an emergency fund you might need next month. We compare them with savings accounts and other options in where to keep your savings.

How are Treasury securities taxed?

Interest is subject to US federal income tax but exempt from state and local income tax. That exemption can matter if you live in a high-tax state.

• Notes and bonds: federal tax is due each year on the interest you receive.
• Bills: the difference between the price you paid and the face value counts as interest, paid at maturity, and federal tax is due on it.
• I bonds: you can report interest each year or wait until you cash in, and TreasuryDirect says you may not owe tax on the interest if you use the money for qualified higher education expenses. Our guide on how to cash in savings bonds covers redeeming paper and electronic bonds and the tax form you'll receive.

Held inside a tax-advantaged account such as an IRA or 401(k), Treasuries follow that account's rules instead.

Outside the US, the equivalents are government bonds such as UK gilts, Government of Canada bonds and Australian Government bonds, usually bought through a broker. In the UK, HMRC's manual says disposals of gilts have been exempt from capital gains tax since 1986; interest has its own rules. Check GOV.UK, the CRA or the ATO for the rules where you live.

What are the risks of investing in Treasuries?

Default risk is generally seen as very low, but Treasuries are not risk-free in price. The US government stands behind the payments, but the market value of a Treasury moves every day.

• Interest rate risk: if rates rise after you buy, newer Treasuries pay more, so yours is worth less if you sell before maturity. Longer terms, especially 20- and 30-year bonds, are hit hardest.
• Inflation risk: fixed payments buy less if inflation runs high. TIPS and I bonds are designed to reduce this, at the cost of other trade-offs. Our guide on how to invest during inflation puts them alongside the other options.
• Reinvestment risk: when a short bill matures, the next one may pay a lower rate.
• Fund risk: a Treasury fund never matures, so its value keeps moving with rates.

Investor.gov groups Treasury bills with cash equivalents, which it describes as the safest asset category but with the lowest returns, where the main concern is inflation outpacing what you earn. That's why many investors use Treasuries as the steady part of a portfolio rather than its growth engine.

Investing involves risk, including loss of principal if you sell for less than you paid. Returns are not guaranteed, and past performance does not predict future results.

Next steps

• See how safe assets fit alongside stocks in our investing for beginners guide.
• Learn how bonds compare with stocks and funds in stocks vs ETFs vs bonds.
• Find ways to grow the income you save and invest in our guide to making money online.