How to Buy Treasury Bills, Notes, and Bonds

Treasuries come in several forms, and the main difference is how long you lend the money and how you get paid.

• T-Bills: Short-term securities that mature in one year or less. They do not pay regular interest. Instead, you buy them at a discount and receive full value at maturity.
• T-Notes: Medium-term securities with maturities from 2 to 10 years. They pay interest every six months.
• T-Bonds: Long-term securities with maturities of 20 or 30 years. They also pay interest every six months.
• TIPS: Treasury Inflation-Protected Securities. Their value adjusts with inflation, which can help protect buying power.
• FRNs: Floating Rate Notes. Their interest rate changes over time based on market conditions.

Treasuries are useful for different kinds of investors. Some people want a safe place for cash they do not need right away. Others want steady income. Some simply want to reduce risk in a larger portfolio.

Another important benefit is tax treatment. Treasury interest is exempt from state and local income tax, although it is still subject to federal tax.

You can buy Treasuries in two main ways: through TreasuryDirect or through a broker, bank, or dealer. The best choice depends on whether you want simplicity or flexibility.

Before buying, it helps to look at a few key details:

• Maturity date: Make sure the term matches when you may need the money.
• Yield and price: Understand what you are earning and what you are paying.
• Tax treatment: Treasury interest is federally taxable but state and local tax-exempt.

A Treasury that looks attractive at first glance may not be a good fit if your cash needs are coming up soon.

If you want to compare current yields with older results, Treasury auction history is worth checking. Recent auction results can show what the latest T-bill, note, or bond offerings paid. Older auction archives can help you see how yields have moved over time and whether a recent auction was unusually strong or weak.

For deeper research, Treasury auction data can show details such as issue date, maturity date, term, and other auction fields. That makes it easier to compare one auction against another before you buy.

Yes, but the method depends on where you bought the security. If you bought through a broker, you can usually sell on the secondary market before maturity. If you bought through TreasuryDirect, you cannot simply sell it there the same way. You would need to transfer it to a broker first if you want to sell before it matures.

That makes TreasuryDirect a better fit for people who plan to hold until maturity, while broker accounts are better for people who want more flexibility.

A few mistakes come up often:

• Buying a long-term Treasury without thinking about cash needs.
• Confusing the coupon rate with the actual yield.
• Forgetting that Treasury interest is still taxable at the federal level.
• Using an unofficial or misleading website.

If you stay focused on term, yield, tax treatment, and liquidity, the process becomes much easier.

Treasury securities are simple once you understand the basics. TreasuryDirect is the cleanest option for direct buying, while brokers give you more flexibility if you want to sell early or trade in the secondary market.