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Choose by when you need your money and how you want to receive its return. Treasury bills mature in 4 to 52 weeks and pay the difference between their purchase price and face value at maturity. Treasury notes mature in 2 to 10 years, and Treasury bonds in 20 or 30 years; both pay interest every six months and return principal at maturity. If you sell before maturity, the market price may be higher or lower than face value.
There is no permanent yield winner: rates and prices vary by offering. Compare current auction results for the specific maturities you are considering, then match the term to your cash needs.
How bills, notes, and bonds differ
All three are marketable U.S. Treasury securities, but they differ chiefly in maturity and payment timing. Bills are designed for shorter terms; notes and bonds provide scheduled interest payments over longer terms. TreasuryDirect lists the following terms and mechanics:
| Feature | Treasury bills | Treasury notes | Treasury bonds |
|---|---|---|---|
| Available terms | 4, 6, 8, 13, 17, 26, or 52 weeks | 2, 3, 5, 7, or 10 years | 20 or 30 years |
| How return is paid | Usually bought at a discount or at par. At maturity, the holder receives face value; the difference between the purchase price and face value is the return. | Fixed-rate interest every six months; principal at maturity | Interest every six months; principal at maturity |
| Rate and price | Rate is fixed at auction | Rate is fixed at auction | Rate is set at auction; the market price later depends on the relationship between the coupon rate and yield to maturity |
| Potential fit | A known short-term cash need or short reinvestment horizon | An intermediate time horizon and preference for periodic interest | A long time horizon and preference for periodic interest, with capacity to tolerate price changes if selling early |
| Early sale | Possible before maturity | Possible; sale price can differ from face value | Possible; sale price can differ from face value |
Terms and payment details are from the TreasuryDirect Treasury bills, Treasury notes, and Treasury bonds pages, and its explanation of pricing and interest rates. These are product terms, not a prediction of future returns or a personalized recommendation.
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The broad dividing line is the date when the security returns principal: a bill comes due within a year, a note in 2 to 10 years, and a bond in 20 or 30 years. The labels are useful, but the specific term matters more than the name. A 4-week bill and a 52-week bill are both bills, yet they place cash on very different schedules. Similarly, a 2-year note and a 10-year note do not have the same holding horizon.
The payment pattern is a second major difference. A bill’s return is realized at maturity rather than arriving as a recurring coupon payment. A note or bond provides interest payments every six months and returns principal at maturity. That distinction affects the timing of cash flows, not just the length of the investment. If you are planning around periodic income, focus on the payment schedule; if you are planning around a known expense date, focus first on maturity.
Which one should you choose?
Start with the date you expect to need the principal. Then consider whether you want cash flows during the term or prefer a return paid at maturity. The maturity ranges and payment schedules below are a decision framework, not individualized financial advice.
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Choose a bill for a short-term cash date
Compare the date you need the money with the available bill maturities, which range from four weeks to 52 weeks. A bill’s ordinary return is received at maturity as the difference between its purchase price and face value; it does not pay a recurring coupon. If your need falls between available maturity dates, account for that timing rather than assuming you can sell at face value before maturity.
For example, if you expect to need cash within the next year, the bill terms provide several possible maturity points to compare against that date. The right term is not automatically the longest bill or the one with the largest quoted rate: it is the term whose maturity best fits when the cash is needed, after checking the specific offering. If the date is uncertain, remember that a bill can be sold before maturity, but an early sale is still a market transaction and may not return exactly the amount you paid.
A bill also means waiting until maturity for its ordinary return. That can be a good match for someone who does not need a stream of payments during the holding period, but it is different from receiving interest every six months. Do not treat a bill’s discount as a coupon payment that arrives monthly or quarterly.
Consider a note for an intermediate horizon
Notes mature in 2, 3, 5, 7, or 10 years and pay fixed interest every six months, with principal due at maturity. They may suit someone seeking periodic interest whose planned holding period fits one of those terms. If you may need the principal sooner, the possibility of selling at a price above or below face value matters.
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Think through two separate questions: how long can the principal remain invested, and do you want scheduled interest payments while it is invested? A note’s fixed-rate semiannual payments address the second question, while its maturity addresses the first. If the likely holding period is shorter than the note’s maturity, the choice carries a potential early-sale price uncertainty. The fact that a note pays interest on schedule does not make its market price fixed before maturity.
Consider a bond for a long horizon
Bonds mature in 20 or 30 years and pay interest every six months. Their longer maturities can expose an early seller to greater price variation as market yields change. A long term is not automatically better: it is a fit only if the maturity and potential price fluctuations are consistent with your plans.
A bond’s long maturity means the principal is scheduled to be repaid much later than with a bill or note. Consider whether you are prepared to hold through that period, or whether you may need to sell. If selling is plausible, assess the price risk as part of the decision rather than focusing only on the coupon or the fact that interest is paid twice a year. A long-term security is not simply a short-term security with a more attractive label; it is a different commitment of time and exposure to market price changes.
Compare actual offerings, not labels
Do not choose based on an assumption that one category always pays the most. Auction rates vary by offering, and a current yield comparison must use dated results for the specific terms under consideration. TreasuryDirect publishes auction information; compare like with like and note whether you are looking at an auction rate, a coupon rate, or a secondary-market yield.
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Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →In practical terms, first identify the actual maturity dates or term lengths you are weighing. Then check the current auction information for those offerings rather than relying on a remembered rate or a general claim about bills, notes, or bonds. A rate from one auction date or maturity does not establish what a later offering will pay. Prices and yields can change, so a yield comparison is a snapshot for the specific securities and dates reviewed.
Also distinguish the security’s coupon from the yield to maturity when looking at a note or bond. The coupon describes its interest rate and scheduled payments; yield to maturity reflects the relationship between those payments, principal repayment, and the price paid. A coupon alone does not tell a prospective buyer what the return would be at a secondary-market price above or below face value.
What happens to price if you sell before maturity?
Marketable Treasury securities can be sold before maturity, but the sale price is set in the market and may differ from face value. For notes and bonds, TreasuryDirect explains the relationship between yield to maturity and the security’s interest rate (coupon): when yield to maturity is higher than the coupon rate, the price is below par; when yield is lower, the price is above par. If they are equal, the security is at par.
This is why a stated coupon is not the same as the return a buyer receives at a particular market price. A buyer paying more or less than face value has a yield to maturity that reflects that price as well as the scheduled payments and principal repayment. The price relationship is described in TreasuryDirect’s pricing and interest rates guide.
Consider the direction of the relationship, not just the fact that prices move. If the market’s yield to maturity for a note or bond is above that security’s coupon rate, its market price is below face value (below par). If the market yield is below the coupon, its price is above par. If yield and coupon are equal, the price is at par. These relationships help explain why two securities with different coupons can trade at different prices, and why the coupon is not a complete measure of the return available to someone buying in the secondary market.
For an investor holding to maturity, the security’s terms govern the scheduled principal repayment, along with the promised interest payments for notes and bonds. For an investor selling earlier, the market price at the time of sale is what matters. It may be higher or lower than face value and may produce a gain or loss relative to the purchase price. That is the central tradeoff behind choosing a maturity longer than the period you expect to hold.
Bills also can be sold before maturity, but their ordinary return is the difference between purchase price and face value paid at maturity. Do not assume that the bill’s return will arrive on a recurring schedule, and do not assume that a sale before maturity will produce the same result as holding until the bill comes due. In every category, the option to sell early is not the same as a promise of a particular sale price.
Treasury backing addresses timely contractual payments; it does not guarantee that an early sale will avoid a market loss. TreasuryDirect describes Treasury securities as a safe and secure investment option because the full faith and credit of the U.S. government guarantees interest and principal payments will be paid on time. That statement concerns payment according to the security’s terms, not protection against a market-price decline if you sell before maturity.
How to buy Treasury marketable securities
You can buy marketable Treasuries at auction or in the secondary market. TreasuryDirect accepts noncompetitive bids; banks, brokers, or dealers are other access routes. The intermediary’s fees, minimums, and procedures depend on its current terms.
Buying at auction and buying in the secondary market are distinct routes to a marketable security. At auction, you consider the terms and details for a particular offering; TreasuryDirect is the official service and accepts noncompetitive bids. A bank, broker, or dealer can also be an access route. In the secondary market, securities can be bought or sold after their original auction, at market prices that may be above or below face value. Check the details and costs of the route you actually plan to use.
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- Choose a maturity and payment pattern. Match the available term to your cash date and decide whether you want a bill’s maturity payment or the semiannual interest from a note or bond. Be specific: “short term” or “long term” is not enough when the available terms range from weeks to decades.
- Review the specific offering. Check the current auction details and rate for the security you intend to buy. Do not treat a rate from a different maturity or auction date as a guaranteed rate for your purchase. If comparing a secondary-market security, consider its market price and yield rather than comparing only its coupon with an auction rate.
- Select a purchase route. Use TreasuryDirect for a noncompetitive auction bid, or contact a bank, broker, or dealer about auction or secondary-market access. TreasuryDirect describes these channels in its buying guide. The route may affect the buying process, so follow the current instructions for the service or intermediary you select.
- Check the route’s minimums and costs. TreasuryDirect’s bill and note product pages list a $100 minimum purchase and purchases in $100 increments. Verify current terms for the specific security and any intermediary; do not assume those TreasuryDirect amounts define an intermediary’s minimum or fees. Do not infer a fee schedule or minimum for a bank, broker, or dealer without checking that provider’s current terms.
- Plan for maturity or an early sale. If you expect to hold to maturity, note the payment date and any scheduled interest dates. If you might sell early, account for the possibility that the market price will be below what you paid. A security’s marketability gives you a route to sell; it does not guarantee a sale at face value or at the price you originally paid.
The $100 minimum is a product-page figure for bills and notes on TreasuryDirect, not a blanket statement about every Treasury security or every provider. TreasuryDirect’s product pages list no current minimum purchase, charges, or procedures for intermediaries. Verify those directly before placing an order, especially if comparing access through more than one route.
Taxes and Treasury backing
TreasuryDirect’s bill and note product pages state that federal tax applies to interest earned, while its bill page says state and local taxes do not apply. Tax treatment and reporting can depend on your circumstances, so verify what applies to your return rather than treating product-page guidance as individualized tax advice.
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallThis is general product-page guidance, not a substitute for checking current tax instructions for your particular investment and circumstances. The cited pages specifically address bills and notes; do not assume that a short summary here resolves every reporting question or applies identically to every taxpayer. If you need to determine how to report a purchase or payment on your return, verify the applicable guidance for your situation.
TreasuryDirect describes Treasury securities as backed by the full faith and credit of the U.S. government and says interest and principal payments are guaranteed to be paid on time. That statement concerns contractual payments; it does not protect an investor from a lower market price when selling before maturity. See the TreasuryDirect FAQs about Treasury marketable securities.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Do not confuse marketable securities with savings bonds
Treasury bills, notes, and bonds are marketable securities: they can be bought and sold, including in the secondary market. Savings bonds are a different Treasury product and generally cannot be sold or transferred in the same way. TreasuryDirect outlines the distinction in its overview of marketable securities.
This distinction matters when comparing products or looking for a way to exit an investment. Bills, notes, and bonds are transferable marketable securities that can be sold before maturity, though the sale price can vary. Do not assume that a savings bond has the same marketability or can be traded through the same channels. The names can sound similar, but the products and their transferability differ.
A simple decision checklist
Before choosing, answer these questions in order:
- When do you expect to need the principal? Match that date to the listed term options: bills from 4 to 52 weeks, notes from 2 to 10 years, or bonds of 20 or 30 years.
- Do you want payments during the term? Bills pay their return at maturity. Notes and bonds pay interest every six months and repay principal at maturity.
- Could you need to sell before maturity? Marketable Treasuries can be sold early, but the price may not equal face value or your purchase price. Consider this uncertainty especially when contemplating a term longer than your expected holding period.
- Have you checked the current offering? Rates vary by auction and prices change. Compare dated information for the particular maturities you are considering rather than relying on a permanent yield ranking.
- Have you checked the purchase route? TreasuryDirect, banks, brokers, and dealers are possible channels. Confirm the selected route’s current minimums, costs, and procedures.
These questions do not identify a universal winner. They help separate the decision into timing, payment preference, potential early sale, current terms, and access. If the date you need the money is uncertain, that uncertainty belongs in the decision; it is not resolved by choosing the security with the longest term or the largest advertised rate.
Frequently Asked Questions
Which Treasury security pays interest every six months?
Treasury notes and bonds pay interest every six months. Bills pay their return at maturity through the difference between purchase price and face value.
Can I sell a Treasury bill, note, or bond before it matures?
Yes. Marketable Treasury securities can be sold before maturity, but the market price may be above or below face value, and you may receive more or less than you paid.
Which currently has the highest yield?
There is no permanent winner established here. Rates vary by offering, so compare dated auction results for the particular maturities you are considering. For a secondary-market purchase, compare the market price and yield to maturity as well as any coupon rate.
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Which should I choose if I need the money soon?
Compare the date you expect to need the cash with bill maturities, which range from 4 to 52 weeks. If the date falls between available maturities, consider the timing carefully rather than assuming an early sale will be at face value.
Are Treasury bills, notes, and bonds the same as savings bonds?
No. Bills, notes, and bonds are marketable securities that can be bought and sold. Savings bonds are a different Treasury product and generally cannot be sold or transferred in the same way.
What is the minimum purchase for a Treasury bill or note through TreasuryDirect?
TreasuryDirect’s bill and note product pages list a $100 minimum purchase and purchases in $100 increments. Check current terms for the specific security and your purchase route; intermediary minimums and fees may differ.
Does a Treasury guarantee mean I cannot lose money if I sell early?
No. TreasuryDirect’s statement about the full faith and credit of the U.S. government concerns timely contractual interest and principal payments. A marketable Treasury sold before maturity can have a market price below what you paid.
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Choose by the date you need the principal and whether you want periodic payments: bills mature in 4 to 52 weeks and pay at maturity, while notes (2 to 10 years) and bonds (20 or 30 years) pay interest every six months. Before buying, compare current details for the actual offering and account for the possibility of a different market price if you sell early.
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