Free tools Windows power users keep installed
One-click scans. No signup required.
Start with when you may need the money. Treasury bills mature in one year or less, while Treasury bonds mature in 20 or 30 years. A bill pays its return at maturity; a bond pays interest every six months. If you sell either security before maturity, the sale price depends on the market at that time—not necessarily its face value.
How do Treasury bills and Treasury bonds differ?
Both are marketable securities issued by the U.S. Treasury, but they differ in maturity and payment schedule. Treasury’s current product descriptions list bill terms from 4 to 52 weeks and bond terms of 20 or 30 years. See TreasuryDirect’s Treasury bills page and its marketable securities overview.
| Factor | Treasury bills | Treasury bonds |
|---|---|---|
| Maturity | One year or less; listed terms are 4, 6, 8, 13, 17, 26, and 52 weeks. | 20 or 30 years. |
| How the return is paid | Sold at face value or at a discount. At maturity, Treasury pays face value; the difference between the purchase price and face value is interest. | Pay fixed interest every six months. The coupon rate is set at auction. |
| Price before maturity | Can be sold before maturity at the then-current market price. | Can trade below, at, or above face value, depending in part on how its coupon rate compares with the market yield to maturity. |
| Minimum purchase | $100, in $100 increments. | $100 for Treasury marketable securities, in $100 increments. |
| Tax information stated by Treasury | Interest is subject to federal tax and exempt from state and local taxes. | The Treasury sources cited here do not establish a directly comparable bond tax summary; check current tax guidance for your circumstances. |
Product terms and minimums above are specifications published by TreasuryDirect, not forecasts of returns. Treasury’s pricing explanation describes how market yields affect prices.
When should I choose a Treasury bill instead of a Treasury bond?
Use the date you expect to need the money as the first filter. A bill may suit a nearer cash need if its maturity date lines up with that date. The listed bill terms offer several shorter maturity points, from 4 weeks through 52 weeks. A bond’s 20- or 30-year maturity is a much longer commitment, so it is more relevant when you can leave the principal invested for a long period or accept the possibility of selling at a market price before maturity.
#1 Best Overall
Do not choose solely by guessing which security will have the higher yield. The comparison depends on a dated auction or market price and the holding period; no universal winner follows from time horizon alone.
How do the payment schedules affect cash flow?
Treasury bills: return at maturity
A bill does not pay periodic interest. It is purchased at face value or at a discount, and Treasury pays face value at maturity. The difference between the price paid and face value is the interest earned. This means the cash flow arrives at maturity rather than in installments.
Rank #2
Treasury bonds: interest every six months
A bond pays fixed interest semiannually, at the coupon rate established at auction. Those payments provide scheduled cash flow, but they do not change the fact that the bond’s principal is tied to a long maturity and may have a different market value if sold early.
Can Treasury bonds lose value if I sell before maturity?
Yes. Treasury explains that a bond’s market price can be below face value when its yield to maturity is higher than its coupon rate, or above face value when the yield is lower. If you sell before maturity, you receive the then-current market price, which may be less or more than face value. Holding to maturity avoids selling at an interim market price, but does not make the long maturity suitable for money you may need sooner.
The Tool Desk
Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Rank #3
Treasury marketable securities are backed by the full faith and credit of the U.S. government. That issuer backing is distinct from a promise that an early sale will return face value. See TreasuryDirect’s explanation of pricing and interest rates.
How can I buy Treasury bills or bonds?
Treasury marketable securities are sold at auction, and investors can also buy them in the secondary market. TreasuryDirect accepts noncompetitive bids; a broker, dealer, or financial institution is another route. TreasuryDirect describes the process and custody distinctions in its marketable securities FAQs.
- Noncompetitive auction bid: You accept the auction-determined return. TreasuryDirect accepts this bid type.
- Competitive auction bid: You specify the return you want; you may receive a partial award or no award.
- Broker or financial institution: The security is held through the commercial book-entry system, placing the provider in the custody chain; service fees may apply.
TreasuryDirect reports a $100 minimum purchase for marketable bills, notes, bonds, TIPS, and FRNs, in $100 increments. Bills are electronic and can be held to maturity or sold earlier. Treasury’s bill page lists weekly auctions for shorter standard terms and an auction every four weeks for 52-week bills; check the Treasury auction calendar for actual dates. Cash management bills have variable terms and are not available through TreasuryDirect.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What should you compare before deciding?
- Maturity against the cash need: Identify when the principal might be needed, then compare that date with the security’s maturity.
- Payment timing: A bill’s return is realized at maturity; a bond pays interest every six months.
- Early-sale exposure: Both are marketable, but a sale before maturity is at the market price, not a guaranteed face-value redemption.
- Purchase and custody route: Compare TreasuryDirect with intermediary options, including any fees and custody arrangements.
- Tax treatment: TreasuryDirect specifically states that bill interest is federally taxable and exempt from state and local taxes. Do not assume that this alone establishes a complete comparative tax result for bonds; consult current tax guidance.
Treasury bills and bonds are marketable securities, not savings bonds. Savings bonds are nonmarketable and cannot be sold or transferred in the same way. The comparison here is general education, not personalized investment or tax advice.
Quick Recap
Best Value
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
