The U.S. Treasury borrows by selling three main kinds of marketable securities: bills, notes and bonds. The core difference is how long until they mature, which also determines how they pay interest. All three are backed by the U.S. government, and their interest is subject to federal income tax but exempt from state and local income taxes.
At a glance
| Feature | Treasury bills | Treasury notes | Treasury bonds |
|---|---|---|---|
| Maturity | One year or less (for example 4, 8, 13, 17, 26 and 52 weeks) | 2, 3, 5, 7 or 10 years | 20 or 30 years |
| How you earn interest | Bought at a discount; face value paid at maturity | Fixed coupon paid every six months | Fixed coupon paid every six months |
| Price sensitivity to rate changes | Low | Moderate | High |
| Typical uses | Cash management, short-term savings | Medium-term saving and income | Long-term income, matching long-dated goals |
Terms on offer change from time to time; TreasuryDirect lists the current schedule.
Treasury bills
Bills pay no coupon. You might pay $9,900 for a bill with a $10,000 face value and receive $10,000 when it matures; the $100 difference is your interest. Because they are so short, bill prices barely move when interest rates change, which makes them popular for parking cash. Bill yields are quoted as a discount rate and an investment rate; see How Treasury Bill Yield Is Calculated and try the Treasury Bill Calculator.
Treasury notes
Notes mature in 2 to 10 years and pay a fixed coupon twice a year. The 10-year note is the best-known benchmark in global finance; read What Is the 10-Year Treasury Yield? Notes are sold at auction near face value; depending on the auction result, the price can be slightly above or below par.
Treasury bonds
Bonds mature in 20 or 30 years and pay semiannual coupons. Their long life means their prices are very sensitive to changes in interest rates: if rates rise, a bond’s market value can fall substantially, although holding it to maturity still returns the full face value. See today’s 30-year Treasury yield.
Other Treasury securities
- TIPS (Treasury Inflation-Protected Securities) adjust their principal with inflation.
- Floating rate notes pay interest that resets with 13-week bill rates.
- Savings bonds (Series EE and I) are non-marketable: you can only redeem them with the Treasury. See our savings bond guide and how savings bond maturity works.
How to buy
You can buy bills, notes and bonds at auction through TreasuryDirect, with a $100 minimum and $100 increments, or through a bank or broker. Brokers also let you buy and sell existing securities on the secondary market. Securities held in TreasuryDirect cannot be sold there directly; they must first be transferred to a broker.
Which is right for you?
That depends on when you need the money, how much price movement you can tolerate if you might sell early, and your tax situation. As a general concept, shorter maturities give more flexibility and less price risk; longer maturities lock in a rate for longer but swing more in value. This is educational information, not advice; consider your own circumstances or a professional’s help.
See current yields for each
- Bills: 3-month Treasury rate
- Notes: 2-year, 5-year, 10-year
- Bonds: 30-year
- All maturities: Treasury rates dashboard