The safest beginner route is usually TreasuryDirect.gov: open an account, link your bank, select a Treasury security and maturity, and submit a noncompetitive bid. You pay at least $100 in $100 increments and accept the auction’s final rate. Use a bank or brokerage account instead when you need competitive bidding, secondary-market trading, cash-management bills, or one account for several investments.
Start with the decision that matters most: when will you need the money?
Treasury securities are not one product. Your time horizon and desired cash flow should determine whether you buy a bill, note, bond, TIPS or floating-rate note (FRN). A security that is appropriate for money needed in a few months can be inconvenient for a long-term goal, while a long maturity can lose market value if you sell before it matures.
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| Security | Available terms or payment pattern | Usually fits | Main issue to check |
|---|---|---|---|
| Treasury bills | 4, 6, 8, 13, 17, 26 or 52 weeks; sold at a discount or at par and pay face value at maturity | Short-term cash needs and a known maturity date | There is no periodic coupon payment; your return is the difference between the purchase price and the amount paid at maturity. |
| Treasury notes | 2, 3, 5, 7 or 10 years; fixed interest paid every six months | Investors wanting scheduled income over a defined term | Selling before maturity exposes you to the prevailing market price. |
| Treasury bonds | Longer-dated marketable Treasury debt; confirm the currently offered term and payment details before ordering | Longer-term income or a duration matched to a distant liability | A long maturity can produce larger price changes when market yields move. |
| TIPS | Marketable Treasury securities designed for inflation exposure; confirm the current term and payment details | Goals where inflation protection is important | The value and cash flows follow the security’s inflation-adjustment rules rather than a plain fixed-rate bill. |
| Floating-rate notes (FRNs) | Marketable Treasury securities with a variable rate; confirm the current term and reset rules | Investors who do not want all interest exposure locked at one fixed rate | The payment can change, so the future income is not fixed in advance. |
The Treasury’s currently stated bill and note terms are listed above; offerings can change. Check the security description and auction announcement for the exact issue before submitting an order.
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TreasuryDirect or a bank or broker?
Both routes give access to Treasury securities, but they solve different problems. TreasuryDirect is the official U.S. government application for buying and holding savings bonds and marketable Treasury securities. It charges no fee to open or manage an account; you pay for the securities you purchase. Start at TreasuryDirect.gov, and make sure the address is exactly the official domain.
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| Need | TreasuryDirect | Bank or brokerage account |
|---|---|---|
| Simple auction purchase | Accepts noncompetitive bids, which is the straightforward choice for most first-time buyers. | Often offers auction access, subject to that firm’s deadlines and account rules. |
| Competitive bidding | Not the normal route for an individual investor. | Competitive bids are submitted through a bank, broker or dealer and can be partially filled or rejected. |
| Secondary-market trading | New marketable securities generally must be held at least 45 calendar days before transfer or sale. | Can generally buy or sell eligible securities in the secondary market; ask about the firm’s pricing, spread and settlement process. |
| Consolidated custody | Holds the Treasury securities electronically in TreasuryDirect. | Keeps Treasuries alongside other investments, which may simplify statements and cash management. |
| Fees | No charge to open or manage the account; the purchase itself is paid for. | Fees, markups, commissions, minimum balances and transfer rules vary. Confirm them directly before placing an order. |
Choose TreasuryDirect when you plan to hold a new issue and want the most direct, low-complexity process. Choose a broker or bank when liquidity, competitive bidding, cash-management bills, or consolidated custody matters more than the simplest account setup.
How to buy a Treasury security through TreasuryDirect
- Define the amount and date. Decide how much cash can remain invested and the date you want it available. Match that date to a bill maturity or, for longer goals, to a note, bond, TIPS or FRN term.
- Open the official account. Go directly to TreasuryDirect.gov and follow the account-opening prompts. Use your own contact details and protect the login information as you would for a bank account.
- Link a bank account. TreasuryDirect uses the linked bank account to fund purchases and send proceeds at maturity. Enter the account and routing information carefully; an incorrect link can delay funding or payment.
- Select the security and auction. Review the available issue, term, auction date, settlement date and maturity date. For bills, confirm whether the offering is a 4-, 6-, 8-, 13-, 17-, 26- or 52-week term. For notes, confirm whether it is a 2-, 3-, 5-, 7- or 10-year issue.
- Choose a noncompetitive bid. Enter the dollar amount you want. A noncompetitive bidder accepts the auction-determined rate, yield or discount margin and receives the amount requested, subject to the auction rules. You do not specify the yield.
- Use the required increments. The minimum bid for marketable Treasury securities is $100, and additional bids must be in $100 increments. The maximum for a noncompetitive bid is $10 million under the Treasury’s current 2026 operational guidance.
- Review before submitting. Check the security type, maturity, amount, linked bank account and reinvestment choice if one is offered. Confirm that the purchase will not leave you short of emergency cash.
- Check the confirmation and settlement. Keep the order confirmation and verify that the bank debit and security appear in your account after settlement. The final auction rate is determined at the auction, not when you enter the order.
TreasuryDirect purchases of new marketable securities generally must be held for at least 45 calendar days before they can be transferred or sold. That restriction makes TreasuryDirect best for money you can leave invested through the initial holding period.
How to buy at auction or in the secondary market through a broker
- Confirm the account is eligible. Ask the bank or broker whether it offers Treasury auction access, secondary-market Treasury trading, or both. Verify any account minimum, commission, markup, transfer restriction and settlement requirement.
- Compare the order types. A noncompetitive order accepts the auction result. A competitive order specifies a yield or discount rate. Competitive bids can be partially filled or rejected if the specified rate is not accepted, so they are not a guaranteed way to obtain the requested amount.
- Read the security details. Confirm the CUSIP or issue description, maturity, coupon or discount treatment, minimum order, settlement date and whether the order is for a new auction or an already issued security.
- For an auction, submit before the firm’s cutoff. A broker’s deadline can be earlier than the Treasury’s public auction time. Save the submission receipt and wait for the allocation and final price.
- For the secondary market, request the all-in price. Ask what you will pay, including any commission, markup, accrued interest or other charge shown by the firm. The quoted market price can be above or below the amount originally paid by another investor.
- Review the confirmation. Check the quantity, price, accrued interest if applicable, settlement date and maturity. Keep the confirmation for your records and tax reporting.
A broker is particularly useful if you may need to sell before maturity. A sale occurs at the prevailing market price, so the proceeds can be higher or lower than your purchase price even when the Treasury continues making its scheduled payments.
How Treasury auctions work
Noncompetitive bids
Noncompetitive bidding is designed to remove rate-selection risk for a buyer who mainly wants the security. You state the dollar amount, accept the auction’s final rate, yield or discount margin, and—subject to the rules—receive the amount requested. This is the standard beginner workflow in TreasuryDirect.
Competitive bids
A competitive bidder states the yield or discount rate they are willing to accept. The Treasury accepts bids according to the auction results. A bid can be filled for less than requested or rejected when its specified rate is not accepted. Use this method only when you understand how a stated yield affects the chance of allocation and the final price.
New issue versus secondary market
At an auction, you buy a new issue on its scheduled settlement date. In the secondary market, you buy from another holder through a dealer or broker after issuance. Secondary-market pricing changes with market conditions, time remaining to maturity and the security’s payment terms. The ability to sell does not mean the sale price will equal your purchase price.
Minimums, limits and account costs
| Item | Current operational fact | What it means for you |
|---|---|---|
| Minimum purchase | $100 | You can start with a relatively small amount. |
| Additional purchase increments | $100 | An order of $550 is not valid; use an amount such as $500 or $600. |
| Noncompetitive maximum | $10 million, under Treasury’s 2026 guidance | Large orders must still follow auction and account rules; ordinary household investors are unlikely to approach this ceiling. |
| TreasuryDirect account fee | No charge to open or manage the account | You still pay the purchase amount for each security. |
| Broker or bank charges | Not uniform | Ask the specific institution about commissions, spreads, markups, account fees and transfer costs. |
| General TreasuryDirect holding restriction | 45 calendar days before transfer or sale of new marketable securities | Do not put near-term spending money in a TreasuryDirect purchase that you may need to move immediately. |
Liquidity: holding to maturity versus selling early
Holding a bill, note, bond, TIPS or FRN to maturity follows the security’s stated payment schedule. Bills pay face value at maturity; notes pay fixed interest every six months and return principal at maturity. Other marketable Treasury securities have their own stated payment and maturity terms.
All of these securities are marketable, so an eligible holder can sell before maturity through the secondary market. The sale price is whatever the market offers at that time. If market yields have risen, an older fixed-rate security will often be less attractive and may sell for less than its purchase price; if yields have fallen, it may sell for more. A sale can therefore create a gain or loss relative to what you paid.
TreasuryDirect’s 45-calendar-day restriction is a separate operational issue from market risk. Even if market conditions change immediately after an auction, a new TreasuryDirect marketable security generally cannot be transferred or sold during that initial period.
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Taxes you should plan for
Interest from Treasury bills and notes is subject to federal income tax. Treasury bills are exempt from state and local taxes, and Treasury note interest has the same state and local tax exemption described by the Treasury’s investor materials. Your filing treatment can depend on the security, account type and personal circumstances, so confirm the details with a qualified tax professional.
Keep auction confirmations, maturity statements and sale records. A sale before maturity can create a gain or loss that is different from the interest or discount income you expected, and your broker or TreasuryDirect tax documents should be checked against your own records.
How to avoid Treasury scams
Use the official TreasuryDirect.gov domain or a financial institution you independently know and trust. Treasury states: “We do not issue securities through private placements, nor do we license financial entities or individuals to act as intermediaries to sell marketable Treasury securities.” Treasury securities are sold through public auctions announced in advance.
- Reject unsolicited guaranteed-return offers. A message promising an exclusive or risk-free Treasury allocation is a warning sign, especially when it pressures you to act immediately.
- Never wire purchase money to an individual. Fund a TreasuryDirect purchase through the verified linked bank account or use the established payment process of your regulated financial institution.
- Be skeptical of “private Treasury” language. Claims that someone has access to a secret private placement or an exclusive government allotment conflict with the public-auction process.
- Inspect the web address. Type TreasuryDirect.gov yourself rather than following a link in an unexpected email, advertisement or social-media message. Look for misspellings and look-alike domains.
- Verify the institution independently. If a broker contacts you, find its telephone number and website through a statement or an independently verified source, not through the suspicious message.
- Do not share one-time codes or passwords. Legitimate account support should not need you to disclose an authentication code to an unsolicited caller.
If you already sent money to a suspected fraudster, contact your bank immediately, preserve the messages and payment records, and report the incident to the relevant authorities. Do not send more money to “unlock” a refund.
Practical purchase plans
Money needed in six months
A bill with a maturity close to your spending date can match the liability without committing the money for years. Select the bill term that ends before you need the cash, allow time for settlement and maturity payment, and avoid relying on an early sale.
Income over several years
A note can provide fixed interest every six months for its stated term. Compare the payment dates with your budget and decide whether you can hold through maturity. If you might need the principal early, use a brokerage account or another route that gives you practical secondary-market access.
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TIPS are the Treasury option intended for inflation exposure. They may suit a goal whose purchasing power matters more than a completely predictable nominal payment. Read the issue’s adjustment and payment rules before buying; do not assume its cash flow behaves like a plain bill or fixed-rate note.
A ladder of maturity dates
Instead of placing all cash in one maturity, divide it among several bills or notes whose maturity dates are spaced over time. The $100 minimum and $100 increments make modest ladders possible. A ladder can reduce the chance that every dollar becomes available—or needs reinvestment—on one date, but it does not eliminate market risk on securities sold early.
Common mistakes and fixes
- Choosing a term before choosing a goal: Write down the date and amount of the liability first, then select the maturity.
- Confusing a bill’s discount with a coupon: Bills do not send a six-month interest check; they are bought below par or at par and pay face value at maturity.
- Using a competitive bid without understanding allocation: Start with a noncompetitive bid unless you specifically understand partial fills and rejection risk.
- Ignoring the 45-day TreasuryDirect restriction: Keep emergency and near-term spending cash outside a new TreasuryDirect marketable-security purchase.
- Assuming “Treasury” means no price risk: A security sold before maturity can produce a gain or loss because its market price changes.
- Overlooking intermediary compensation: Ask a bank or broker for the complete cost, including any spread, markup, commission or transfer charge.
- Trusting a polished scam website: Close the message, type the official address yourself and verify any institution through independent contact information.
A safe pre-purchase checklist
- Have I identified the date when I need the money?
- Does the maturity fit that date without requiring an early sale?
- Am I buying a bill, note, bond, TIPS or FRN, and do I understand its payment pattern?
- Is my order at least $100 and in $100 increments?
- Am I using a noncompetitive bid unless I deliberately accept competitive-bid allocation risk?
- Have I checked the exact TreasuryDirect.gov address or independently verified the financial institution?
- Have I confirmed any broker commission, markup, spread, account rule and transfer cost?
- Have I reserved enough cash for emergencies and taxes?
- Will I retain the confirmation and maturity or sale records?
For most beginners, the process is straightforward: use the official TreasuryDirect application, place a noncompetitive order that matches your time horizon, and leave the money invested through maturity or the applicable holding period. Move to a bank or broker when you need competitive bidding, secondary-market liquidity or consolidated investment custody, and treat every unsolicited “guaranteed Treasury” offer as a potential scam.
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