Treasury bills, notes and bonds: the US government’s debt menu

When the US government spends more than it collects in taxes, the Treasury borrows the difference by selling securities. The ones that can be bought and sold between investors after issue are called marketable Treasury securities, and they come in five families: bills, notes, bonds, Treasury Inflation-Protected Securities (TIPS) and floating rate notes (FRNs). Together they make up the deepest bond market in the world and the benchmark against which most other borrowing is priced.

The differences between them come down to two things: how long the money is lent for, and how the interest is paid. A 4-week bill and a 30-year bond are both loans to the same borrower, but they behave like very different investments. This page lays out the menu as TreasuryDirect describes it in 2026, shows how each type pays with worked examples, and explains how investors choose between them. How the securities are sold is covered on Treasury auctions: how the US sells its debt and how to read results; how their prices react to yield changes is on Bond prices and yields: why prices fall when yields rise.

The menu at a glance

The names follow maturity at issue. A bill is one year or less, a note is more than one year up to 10, and a bond is longer than 10. Once issued, a security keeps its name even as time passes: a 30-year bond with 18 months left is still called a bond, though it now behaves much like a 2-year note.

Treasury bills: interest by discount

Bills pay no periodic interest. Instead you buy them for less than face value and receive the full face value at maturity; the difference is your interest. TreasuryDirect lists regular terms of 4, 6, 8, 13, 17, 26 and 52 weeks. The 52-week bill is auctioned every four weeks and the others weekly. Treasury also sells cash management bills at irregular times and terms, and those are available only through a bank, broker or dealer.

Bill yields are quoted two ways. The discount rate is the traditional quote: the discount as a fraction of face value, annualized on a 360-day year. The investment rate (also called the bond-equivalent or coupon-equivalent yield) expresses the return on the amount you actually pay, on a 365-day year, which makes it comparable with note and bond yields.

Bills are the closest thing to cash in the bond market. Their short life means their price barely moves when yields change, which is why money-market funds hold them in bulk (see Money market funds and cash: T-bills, savings and real returns). The trade-off is reinvestment risk: when a bill matures you must buy another at whatever yield the market offers then.

Treasury notes and bonds: fixed coupons

Notes are sold with terms of 2, 3, 5, 7 and 10 years; bonds with terms of 20 and 30 years. Both pay a fixed coupon rate, set at auction, every six months until maturity, and repay face value at the end. TreasuryDirect lists the 2-, 3-, 5- and 7-year notes as auctioned monthly; the 10-year is a new issue in February, May, August and November, reopened in the other eight months. Bonds have four original-issue auctions and eight reopenings a year. A reopening sells more of an existing security, with the same maturity date and coupon, rather than creating a new one.

The coupon is fixed, but the market price of the note is not. If yields rise after you buy, the price falls, and the longer the maturity, the larger the fall for the same yield change. That interest-rate risk is the mirror image of the bill's reinvestment risk. A 30-year bond locks in its coupon for three decades, which is welcome if rates fall and costly if they rise. The arithmetic is on Bond prices and yields: why prices fall when yields rise and the sensitivity measures on Bond duration and convexity: measuring interest-rate risk.

The 10-year note has a special role: it is the reference rate for mortgages, corporate borrowing and stock valuation around the world. It has its own page, The 10-year Treasury yield: why it matters and what drives it.

TIPS: principal that tracks inflation

TIPS are sold in 5-, 10- and 30-year terms. Their principal rises with inflation and falls with deflation, measured by the Consumer Price Index. The coupon rate is fixed at auction (TreasuryDirect states it is never less than 0.125%) and is applied to the adjusted principal every six months, so the dollar payment changes over time. At maturity you receive the greater of the adjusted principal or the original principal.

The yield on a TIPS is a real yield, a return above inflation. Comparing it with an ordinary Treasury of the same maturity gives the market's breakeven inflation rate, explained on TIPS and breakeven inflation: how inflation-protected bonds work. One tax wrinkle: TreasuryDirect notes that increases in principal can affect your federal taxes in the year they occur, even though you don't receive them in cash until maturity.

FRNs: a rate that resets

Floating rate notes have a 2-year term. Their interest rate is an index rate, the highest accepted discount rate of the most recent 13-week bill auction, plus a fixed spread set at the FRN's first auction. Because the index changes with every weekly bill auction, the rate resets weekly. Interest accrues daily and is paid every three months. New FRNs are issued in January, April, July and October, with reopenings in the other months.

Because the rate follows short-term yields, an FRN's price stays close to par. It behaves more like a series of bills than like a 2-year fixed note.

Taxes, minimums and where to buy

Every marketable Treasury has a $100 minimum and is sold in $100 increments. Interest is subject to federal income tax but not state or local income tax, which can make Treasuries more attractive than a bank deposit or corporate bond with the same yield for investors in high-tax states. The details of how interest income is taxed are on How dividends and interest are taxed: qualified, ordinary, muni.

There are two ways to buy at auction. Through a TreasuryDirect account you can bid only noncompetitively, accepting whatever rate the auction sets. Through a bank, broker or dealer you can also buy existing securities in the secondary market at any time, and you can sell before maturity there. TreasuryDirect also sells savings bonds (Series EE and I), a different kind of product this page doesn't cover.

Choosing along the menu: real yields on one day

On 28 October 2026 the constant-maturity yields for the main maturities were:

That day, stepping from a 1-month bill to a 10-year note added about 1 percentage point of yield. Whether that extra point is worth it depends on what the investor is trying to do:

• Money needed soon belongs at the short end, where price changes are tiny and the maturity can be matched to the date the cash is needed.
• Locking in income for years points toward notes and bonds, at the cost of price swings if the bond must be sold before maturity.
• Protecting purchasing power is the job of TIPS, which give up some nominal yield in exchange for inflation adjustment.
• Keeping pace with short rates without rolling bills every few weeks is what FRNs offer.

The shape of this menu on any day is the yield curve, discussed on The yield curve: shapes, slopes and what each end tells you. The 20-year yielding more than the 30-year on this date is a small kink that has been common since the 20-year was reintroduced.

Pitfalls and limitations

• "Risk-free" means default-free, not price-free. The US government is treated as the safest borrower in dollars, but a long Treasury sold before maturity can lose a large share of its price when yields rise. Long-bond funds lost more than half their price from 2020 to 2026.
• Compare like with like. A bill's discount rate understates its return relative to a note's yield. Use the investment rate when comparing.
• Taxes change comparisons. A 4.5% Treasury and a 4.5% CD are not equal after tax for someone paying state income tax.
• TIPS are not inflation-proof in the short run. Their market price still moves with real yields, and it can fall even while inflation is high.
• Liquidity varies. The newest issue of each maturity ("on-the-run") trades most actively; older issues ("off-the-run") can have wider bid-ask spreads.

The five types compared

How Finabase does it

Finabase does not list individual Treasury securities (CUSIPs, coupons or prices). It does quote the yields of the benchmark maturities.

• The Treasury yields page shows live yields for 1, 3 and 6 months and 1, 2, 3, 5, 10, 20 and 30 years, symbols US1M=T through US30Y=T, with daily change, performance columns and 52-week ranges.
• Each maturity has a symbol page with a chart, for example the 3-month bill yield or the 10-year note yield.
• Treasury ETFs such as SHY (short notes), IEF (intermediate) and TLT (long bonds) have full symbol pages.

The table of securities on this page was compiled by Finabase Research from TreasuryDirect; the yields come from Federal Reserve data.

Frequently asked questions

What is the difference between a T-bill, a T-note and a T-bond?

Maturity and how interest is paid. Bills mature in a year or less and pay no coupon; you buy them at a discount. Notes mature in 2 to 10 years and bonds in 20 or 30 years, and both pay a fixed coupon every six months.

How do Treasury bills pay interest?

By discount. You pay less than face value and receive the full face value at maturity; the difference is the interest. In the May 20, 2024 auction, a 13-week bill sold for about $986.74 per $1,000 of face value, paying $13.26 at maturity 91 days later.

Are Treasury securities taxed?

Yes, federally, but not by states or localities. Interest on bills, notes, bonds, TIPS and FRNs is subject to federal income tax and exempt from state and local income tax, according to TreasuryDirect.

Can I lose money on a Treasury?

Not if you hold it to maturity, because the US government repays face value in full. You can lose money if you sell before maturity after yields have risen, and the loss can be large for long bonds.

What is the minimum investment in Treasuries?

$100. Every marketable Treasury security is sold in $100 increments, whether bought through TreasuryDirect or a broker.

Summary

The Treasury borrows through five kinds of marketable security. Bills, from 4 to 52 weeks, are sold at a discount and pay face value at maturity; notes, from 2 to 10 years, and bonds, of 20 and 30 years, pay fixed coupons twice a year; TIPS adjust their principal with the CPI; and two-year FRNs pay a rate tied to the 13-week bill. All are sold in $100 increments and their interest is free of state and local income tax. Choosing among them is a trade between reinvestment risk at the short end and price risk at the long end, with TIPS and FRNs addressing inflation and floating rates. On 28 October 2026 that menu offered yields from 4.07% for one month to 5.37% for 30 years.