How to Buy Treasury Bonds, Bills & Notes

Most explanations of how to buy treasury bonds stop at “open a TreasuryDirect account.” That skips the two decisions that change what you end up with: which maturity you pick, and which state you file in.

This page covers the whole chain: what bills, notes and bonds are, the three places you can buy them, what each pays right now, and what the state tax break is worth in dollars. Every yield comes from the U.S. Treasury’s own daily rate file. DollarVisor is never paid for placement, and companies cannot pay for placement in our rankings. The walkthrough below shows the screens before we get to the numbers.

1. Bills, Notes and Bonds: What You Are Actually Buying

Quick Answer: All three are loans to the U.S. government, separated only by length. Bills run a year or less and pay you by selling below face value. Notes run 2 to 10 years and pay interest every six months. Bonds run 20 or 30 years and also pay every six months. The minimum for all of them is $100.

People say “Treasury bonds” to mean the whole family. The Treasury does not, and the difference shows up in the auction calendar and in how you get paid.

• Bills. Sold at a discount. Pay $980, get $1,000 back at maturity, and the $20 gap is your interest. No coupon payments in between.
• Notes and bonds. Sold at face value with a stated coupon. Interest lands in your bank every six months; principal comes back at the end.
• TIPS and floating-rate notes. TIPS adjust the principal for inflation; floating-rate notes reset with bill rates.

The minimum for any Treasury bill, note, bond, TIPS or floating-rate note is $100, in $100 steps, per TreasuryDirect. No minimum balance, no account fee, no broker in the middle.

Source: TreasuryDirect auction schedules, August 2026.

Pick the term to match when you need the money back, not to chase the highest number on screen. Our investing guides cover where fixed income sits in a portfolio.

2. The Three Places You Can Buy Treasuries

Quick Answer: You have three routes: TreasuryDirect, a brokerage account, or a Treasury ETF or money market fund. TreasuryDirect charges nothing but locks your money until maturity. A brokerage lets you sell early. A fund gives you instant access and a rolling ladder, but charges an expense ratio.

The route changes two things: cost, and how fast you can get out.

One caveat on funds: a Treasury ETF never matures, so you never get a guaranteed dollar back on a set date. You get whatever it is worth the day you sell: the same wrapper mechanics as ETFs versus index funds.

3. How to Buy Treasury Bonds on TreasuryDirect, Step by Step

Quick Answer: Open a TreasuryDirect account with your Social Security number, U.S. address and a bank account. Then use the BuyDirect page to pick the security, the term and the amount in $100 steps. Treasury pulls the cash from your bank on issue day and pays it back at maturity.

It takes about twenty minutes the first time, ninety seconds after that.

1. Open the account. Register at TreasuryDirect.gov with your Social Security number, U.S. address, email and bank details.
2. Link your bank. That account is where money is pulled from and where interest and principal come back. Get it right: changing it later needs paperwork.
3. Open BuyDirect. This is the purchase page. Choose bill, note, bond, TIPS or floating-rate note.
4. Pick the term and the auction. Each term shows its next auction date. Pick the one maturing when you want the money back.
5. Enter the amount. Minimum $100, in $100 multiples. In TreasuryDirect you can only bid noncompetitively, so you take whatever rate the auction sets.
6. Submit before the cutoff. Order before the auction closes. Treasury debits your bank on issue day, not order day.
7. Decide about reinvestment. Roll the proceeds into the next auction of the same term, or let the cash land back in your bank.

About that word “noncompetitive.” It sounds like a bid you could lose. You cannot. You name the amount, not the rate, and you always get filled at whatever rate the auction sets. Competitive bidding, where you name a rate and risk getting nothing, runs through banks and dealers.

New to all this? Account setup is the same first step in our beginner investing roadmap.

4. What Treasuries Actually Pay Right Now

Quick Answer: On July 16, 2026 the Treasury par yield curve ran from 3.76% at one month to 5.09% at twenty years. That means $10,000 earns about $376 a year in the shortest bill and about $509 a year in a 20-year bond: a $133 gap for locking up your money 240 times longer.

Longer does not always mean more. The 30-year pays less than the 20-year here: a real feature of this curve, not a typo.

Source: U.S. Treasury Daily Par Yield Curve Rates, 2026. Dollar figures by DollarVisor.

Yields move daily, so treat these as a snapshot. The shape is what holds: the gap between a 6-month bill and a 10-year note was only 63 basis points, thin pay for nine and a half extra years of risk. That is one reason short bills compete well against the best high-yield savings accounts.

5. The State Tax Break Most Savers Never Price In

Quick Answer: Interest on Treasury bills, notes and bonds is exempt from state and local income tax under federal law. On $10,000 of interest that is worth $930 a year to a California filer, $600 in New York and exactly nothing in Texas or Florida. It is the single biggest reason a Treasury can beat a savings account paying the same rate.

Federal law is blunt: obligations of the United States are exempt from state and local taxation, under 31 U.S.C. § 3124. You still owe federal tax on the interest, reported as taxable interest under IRS Topic no. 403. Bank interest gets no such protection, so the same 3.94% is not the same 3.94% in every zip code.

Rates are the marginal rate a single filer with roughly $100,000 of taxable income would face, from official state sources: California FTB, New York, Georgia, Illinois, Michigan, North Carolina, Pennsylvania and Ohio. Dollar figures by DollarVisor.

Flip it into a comparison rate. A 3.94% six-month bill is worth the same after tax as a savings account paying 4.34% to a Californian, 4.19% to a New Yorker and exactly 3.94% to a Texan. Compare headline yield to headline yield in a high-tax state and you understate the Treasury. DollarVisor shows the state math instead of a national average.

6. Where Treasury Yields Have Moved in 2026

Quick Answer: Through the first half of 2026 short rates barely moved while long rates climbed. The 3-month bill went from 3.65% to 3.84%, but the 2-year note rose from 3.47% to 4.16% and the 30-year from 4.86% to 5.00%. Waiting cost short-term savers almost nothing and cost long-term buyers real yield.

This matters for timing. Waiting on a 3-month bill gained about 19 basis points in seven months. Waiting on a 2-year note gained 69.

Source: U.S. Treasury Daily Par Yield Curve Rates, 2026.

Nobody times this reliably. The practical answer is a ladder: split the money across several maturities so a rung comes due regularly and you reinvest at whatever the market offers, the same spread-the-risk logic used across the DollarVisor investing section.

7. What Happens If You Sell Before Maturity

Quick Answer: Hold to maturity and you get exactly the face value back. Sell early and you get the market price, which falls when rates have risen since you bought. Treasuries carry no credit risk, but they absolutely carry price risk if you need out early.

This is the misunderstanding that costs people money. “Risk-free” means the government pays you back on the due date. It says nothing about the bond’s value next Tuesday.

The longer the term, the harder the swing. A 30-year bond bought at 4.86% in January was worth less by mid-July, when the same bond yielded 5.00%, because the price has to fall for the yield to rise. A 3-month bill barely moves: too little time left for rates to do damage.

• Need the money inside a year? Use bills. Price risk is minimal and you can wait for maturity.
• Buying a 10, 20 or 30-year bond? Only with money you can leave alone, or through a brokerage where selling is easy.
• Holding in TreasuryDirect? You cannot sell from there. The security must be transferred to a broker first, which takes time you may not have.

It is the same trade-off that shows up in dividend investing: the income is predictable, the market value is not.

8. Treasuries vs the Other Places Your Cash Could Sit

Quick Answer: Treasuries beat savings accounts on state tax and rate certainty, and lose on flexibility. They beat CDs on early-exit terms. Against stocks they are not a competitor at all: different job, different timeline, different risk.

Compare the three things that differ: what you keep after tax, whether the rate is locked, and how fast you can get out.

• Versus a high-yield savings account. The bank rate can drop the day after you deposit; a Treasury rate is fixed for its term. Bank interest is also taxed by your state. Compare after-tax, not headline: see our guide to high-yield savings accounts.
• Versus a CD. Similar lock-up, similar certainty. But a CD penalty is a fixed cost you know upfront, a Treasury early-sale cost depends on where rates went, and a CD gets no state tax break.
• Versus stocks and funds. Not the same job. Treasuries protect money you have; equity funds grow money you can risk. See index funds and ETFs.
• Versus dividend stocks. A 5.00% 30-year bond pays more than most dividend yields and cannot cut its payment. It also never grows.

9. The Verdict: Which Treasury Fits Which Job

Quick Answer: Our pick for most people is a 6-month bill bought through a brokerage and rolled at maturity: 3.94% as of July 16, 2026, state-tax-free, with an exit option if plans change. Go longer only for money with a matching timeline.

Three cases, by when you need the money:

• Money you need within a year. Buy 3-month or 6-month bills. At 3.84% to 3.94%, the gap to a 10-year note is too small to justify locking up a decade.
• Money with a known date 2 to 5 years out. Buy the note maturing closest to that date. At 4.16% to 4.28%, you fix the outcome and stop guessing.
• Retirement income you will not touch. The 20-year bond at 5.09% beat the 30-year on the July 16 curve. If you go long, check which of the two pays more that week.

One more thing worth saying plainly: a Treasury ladder protects money, not people. A car accident, a hospital stay or a house fire gets handled by coverage, not by bonds, which is why our guide to the types of insurance and which ones you need sits alongside this one. Companies cannot pay for placement in our rankings.

10. Frequently Asked Questions

1. What is the minimum amount to buy a Treasury bond?

$100. TreasuryDirect sets a $100 minimum for every bill, note, bond, TIPS and floating-rate note, and purchases go up in $100 multiples. No account fee, no minimum balance.

2. Do I pay taxes on Treasury bonds?

You pay federal income tax on the interest, but no state or local income tax: federal law exempts U.S. obligations under 31 U.S.C. § 3124. On $10,000 of interest that is worth about $930 a year in California and nothing in Texas or Florida.

3. Is it better to buy Treasuries through TreasuryDirect or a broker?

TreasuryDirect costs nothing but you cannot sell from it: the security has to be transferred out first. A brokerage is usually free at auction and lets you sell any time. If you might need the money early, use a broker.

4. How often can I buy Treasury bills?

Weekly for the short ones. The 4-week and 8-week bills are announced Tuesday and auctioned Thursday. The 13-week and 26-week are announced Thursday and auctioned the following Monday. Notes and bonds run monthly or quarterly.

5. What happens if I need my money before the bond matures?

You sell it at whatever it is worth that day, which may be less than you paid if rates have risen. Held to maturity, you always get full face value back. Short bills barely move; long bonds can swing a lot.

This page is information, not financial advice. Yields, tax rates and auction schedules change. See our disclaimer.