Treasury bills, notes, and bonds

The U.S. Treasury issues marketable securities with different maturities and payment structures. Bills generally sell at a discount or at par and pay face value at maturity. Notes and bonds pay periodic coupon interest and repay principal under their terms.

Choose by purpose

For an upcoming expense, start with the date you need the funds. For longer-term exposure, examine sensitivity to changing yields. Government repayment backing does not keep a long bond's market price fixed before maturity.

Auction or secondary market

Treasuries can be obtained through eligible institutions, and TreasuryDirect offers direct auction access under its rules. At a noncompetitive auction, you accept the auction-determined rate or yield. Secondary-market purchases use an available market price and may include accrued interest.

A bill example

Paying $990 for a bill that returns $1,000 produces a $10 difference before tax and costs. Annualizing that return requires the actual time to maturity and the applicable quotation convention. A bill's quoted discount rate may differ from an investment-yield calculation.

Check the auction calendar, settlement date, and transfer or sale procedures. TreasuryDirect and a brokerage account have different operational workflows, especially when you want to sell before maturity.

General financial education, not personalized investment or tax advice. Investing involves risk, including loss of principal.