Treasury bills, notes, and bonds are all marketable U.S. Treasury securities, but they differ mainly in how long they run and when they pay interest. Bills mature in 4 to 52 weeks and generally pay their return at maturity; notes run 2 to 10 years and bonds 20 or 30 years, with both paying interest every six months. Selling any of them before maturity means accepting the market price at that time, which can be more or less than the amount due at maturity.
How Treasury bills, notes, and bonds compare
The core distinction is maturity: a bill is short-term, a note is intermediate-term, and a bond is long-term. TreasuryDirect lists the following terms and payment patterns:
| Security | TreasuryDirect terms | How returns are paid | Typical planning consideration |
|---|---|---|---|
| Treasury bills | 4, 6, 8, 13, 17, 26, or 52 weeks | Usually bought at a discount or at face value; the face value is paid at maturity. When bought at a discount, the difference between the purchase price and face value is the interest. | Short maturity; no periodic coupon payment. |
| Treasury notes | 2, 3, 5, 7, or 10 years | Fixed interest rate set at auction, paid every six months; principal is paid at maturity. | Intermediate maturity with regular interest payments. |
| Treasury bonds | 20 or 30 years | Interest is paid every six months; principal is paid at maturity. | Long maturity and potentially greater exposure to market-price changes if sold early. |
These are product terms, not a ranking of likely returns. TreasuryDirect’s pages describe the terms for Treasury bills, Treasury notes, and Treasury bonds.
How each security pays
Treasury bills: the return is generally realized at maturity
A bill does not pay interest every six months. It is commonly purchased below its face value; at maturity, the Treasury pays face value, and the difference is the investor’s interest. Treasury bills may also be sold at face value, so the discount mechanism does not mean every bill is necessarily purchased below par. See TreasuryDirect’s bill description and pricing explanation.
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Treasury notes and bonds: interest arrives twice a year
Notes and bonds are fixed-rate securities that pay interest every six months and return principal at maturity. For notes, TreasuryDirect says the interest rate is set at auction. A bond’s longer term does not, by itself, guarantee a higher return: the yield depends on the issue’s terms and, if purchased later in the secondary market, the price paid.
What happens if you sell before maturity
Treasury marketable securities can be sold before maturity, but an early sale happens at the prevailing market price. That price may leave the seller with less or more than the principal amount due at maturity. TreasuryDirect explains this distinction on its marketable securities overview.
For a fixed-rate note or bond, the relationship between its coupon rate and yield to maturity helps explain whether its market price is below or above face value. TreasuryDirect’s pricing and interest-rate guide gives this rule:
- If yield to maturity is above the security’s coupon rate, its price is below face value.
- If yield to maturity equals the coupon rate, its price is at face value.
- If yield to maturity is below the coupon rate, its price is above face value.
In this context, TreasuryDirect defines yield to maturity as “the annual rate of return on the security.” The quoted yield is not a promise that an investor who sells early will receive a particular amount; the sale price depends on market conditions at the time.
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When you may need the money
Start with the date the funds may be needed. A bill’s term is no longer than 52 weeks; a note’s is 2 to 10 years; and a bond’s is 20 or 30 years. Choosing a maturity close to a known cash need can reduce the chance that you will have to sell early, though it does not determine the return available at purchase.
Whether you want periodic cash flow
Bills generally provide their value at maturity rather than making recurring coupon payments. Notes and bonds pay interest twice a year. That difference affects the timing of cash received, not whether one category is inherently more profitable.
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How much price movement you can tolerate
If you might sell before maturity, consider how market-price changes could affect the amount received. Longer maturities can be more exposed to price changes when market yields move. That is a price-risk consideration, not a prediction about the direction of future prices or yields.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Where to buy Treasury marketable securities
TreasuryDirect says marketable securities can be purchased at Treasury auctions or in the secondary market. Its FAQs about Treasury marketable securities describe TreasuryDirect as a channel for noncompetitive auction bids and identify brokers, dealers, and financial institutions as other purchase channels. Access and order options depend on the channel; compare fees and whether the channel supports the auction or secondary-market transaction you want.
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“Treasury bond” refers here to the marketable 20- or 30-year security. U.S. Savings Bonds are a different Treasury product, so the two terms should not be used interchangeably. TreasuryDirect distinguishes Treasury bonds in its bond description.
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