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Choose by when you expect to need your money and whether you want periodic interest: Treasury bills mature in 4 to 52 weeks and pay their return at maturity; Treasury notes mature in 2 to 10 years and Treasury bonds in 20 or 30 years, with both paying interest every six months. If you sell a note or bond before it matures, its market price may be higher or lower than its face value. Compare current auction results for the specific maturities you are considering rather than assuming one type always pays more.
How bills, notes, and bonds differ
All three are marketable securities issued by the U.S. Treasury, but they have different maturities and payment schedules. The maturity is when the Treasury repays the principal according to the security’s terms. Bills are the short-term option; notes and bonds are longer-term securities that make regular interest payments.
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| Feature | Treasury bills | Treasury notes | Treasury bonds |
|---|---|---|---|
| Terms listed by TreasuryDirect | 4, 6, 8, 13, 17, 26, or 52 weeks | 2, 3, 5, 7, or 10 years | 20 or 30 years |
| How payments work | Typically sold at a discount or at par; the face value is paid at maturity, and 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. |
| How the rate is determined | Fixed at auction. | Fixed at auction. | Set at auction; the market price later depends on how the security’s yield to maturity compares with its interest rate. |
| Possible fit | A cash need within a year or a short reinvestment horizon. | An intermediate time horizon and a preference for periodic interest. | A long time horizon and a preference for periodic interest, with willingness to accept price variation if selling early. |
| Early sale | May be sold before maturity. | May be sold before maturity; sale price may differ from face value. | May be sold before maturity; sale price may differ from face value. |
Terms, payment mechanics, and minimums are described on the TreasuryDirect Treasury bills, Treasury notes, and Treasury bonds pages. The fit descriptions are a decision framework based on those mechanics, not individualized financial advice.
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Before comparing yields, write down when you expect to need the principal. That date is often a more useful starting point than a general preference for bills, notes, or bonds. A Treasury security has a stated maturity, but your plans may not: if the date you need cash arrives before the security matures, you may need to sell it in the market rather than receive principal at maturity.
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Then consider whether you want cash payments along the way. Bills deliver their return at maturity. Notes and bonds pay interest every six months and repay principal at maturity. Neither schedule is inherently better. It depends on whether you want periodic payments or prefer a short-term security whose return is realized when it comes due.
Choose a bill for a near-term cash date
If you expect to need the principal in a few weeks or months, compare that date with available bill maturities. Bills run from 4 to 52 weeks, with terms of 4, 6, 8, 13, 17, 26, or 52 weeks. Their ordinary return arrives at maturity rather than as a monthly or quarterly coupon. This can make the timing easier to match to a known short-term need, but the money is committed until maturity unless you sell the bill beforehand.
For example, someone planning for a cash need within the year can compare the expected date with the listed bill terms and consider whether a bill would mature before that date. The example is about matching timing, not a recommendation to select a particular term or offering. If the date is uncertain or could come sooner, remember that selling early means accepting the price available at that time.
Consider a note for an intermediate horizon
Notes offer maturities of 2, 3, 5, 7, or 10 years. They may suit someone who wants regular interest payments and can leave the principal invested through the selected term. Because the interest is paid every six months, cash arrives periodically rather than only at maturity. The principal is repaid at maturity according to the security’s terms.
When deciding among note terms, ask whether the specific maturity lines up with the date you expect to use the principal. A 2-year note and a 10-year note are both Treasury notes, but their maturities are substantially different. The label alone does not tell you whether either one fits: the planned holding period and your need for periodic interest matter.
Consider a bond only for a long horizon
Bonds mature in 20 or 30 years and pay interest every six months. A long maturity is not automatically better: choose one only if the time horizon fits your plans and you can tolerate the possibility that an early sale will bring more or less than face value.
A bond’s scheduled interest payments do not remove the question of what happens to principal if you need to sell before maturity. If your likely cash need is much earlier than 20 or 30 years, compare whether a shorter-term security better matches that need. The key distinction is not simply that bonds are “longer”; it is that selling before the stated maturity exposes you to the price the market offers then.
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Bills return the difference at maturity
A bill’s return generally comes from the gap between its purchase price and the face value paid at maturity. For example, if a bill is purchased below face value and held to maturity, the difference is the interest earned. The exact purchase price is determined at auction or in the secondary market; there is no six-month coupon payment on a bill.
Treasury bills may be sold at a discount or at par. In the discount example, the investor pays less than the face value and receives the face value at maturity. This is why it is more accurate to describe the bill’s return as arriving at maturity than to describe it as a regular coupon. If a bill is sold before maturity, the investor is selling at a market price, so the outcome is not simply the scheduled difference between the original purchase price and face value.
Notes and bonds pay coupons, but their market prices move
A note or bond has an interest rate established at auction and pays interest every six months. After issuance, its market price can be above, at, or below face value. TreasuryDirect explains the relationship this way: when the yield to maturity is higher than the security’s interest rate, the price is below par; when yield is lower, the price is above par. The relationship matters if you sell before maturity, because the sale price may not equal the principal amount due at maturity.
In practical terms, the interest rate on an existing note or bond and its current market yield are related but not identical concepts. The security’s interest rate is established at auction; later, its price may adjust as yields change. That is why a note or bond with a fixed interest payment can still have a changing market value before it matures. The price relationship is especially important for someone who may not be able to hold the security for the full term.
Holding to maturity and selling early are therefore different decisions. If you hold the security through maturity, principal is repaid according to its terms. If you sell beforehand, the market price at that time affects what you receive. Longer maturities create a longer period in which market yields can change before your planned exit, so a long-term security may be a poor match for money you might need unexpectedly.
TreasuryDirect says Treasury securities are considered safe and secure because the full faith and credit of the U.S. government guarantees timely interest and principal payments. That statement concerns contractual payments; it does not guarantee that an investor who sells before maturity will avoid a market-price loss. The guarantee of scheduled payments and the price risk of an early sale address different things. See Understanding Pricing and Interest Rates and Treasury Marketable Securities FAQs.
Compare current yields rather than picking a permanent winner
There is no permanent “best-yield” type. Rates are set or determined at auction and vary by offering; market prices also move. To compare options, look at dated auction results for the specific bill, note, or bond maturities you are considering. Make sure the figures are for comparable dates and terms, and decide whether the payment schedule and maturity fit your needs before focusing on yield.
A quoted yield is not a substitute for matching the security to your cash-flow plan. A higher yield on a longer-term security may come with more exposure to price changes if you must sell before maturity. The relevant choice is the offering whose maturity, payment timing, and risk of early sale fit your circumstances.
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How to buy Treasury bills, notes, and bonds
Marketable Treasury securities are available at Treasury auctions and in the secondary market. TreasuryDirect is the Treasury’s official service and accepts noncompetitive bids. Banks, brokers, and dealers also provide access, and investors can buy or sell in the secondary market. Check any intermediary’s current fees, minimums, and order procedures directly rather than assuming they match TreasuryDirect.
The access route is a separate choice from the security type. TreasuryDirect provides an official way to participate in an auction with a noncompetitive bid. A bank, broker, or dealer may be another route to an auction or to the secondary market. If buying or selling through an intermediary, confirm how that firm handles orders, what fees or minimums it currently applies, and what process it uses for an early sale. Those terms can vary by intermediary, so do not assume that a minimum or charge listed by one provider applies everywhere.
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- Choose a maturity that fits your cash date. Compare your expected need for principal with the available bill, note, or bond terms. If the cash date is uncertain, consider how you would handle a need that comes before maturity.
- Decide how you want payments to arrive. Bills return their value at maturity; notes and bonds pay interest every six months and principal at maturity. Use that distinction to decide whether periodic interest or a maturity payment suits your plans.
- Check the offering and its current auction information. Compare the specific maturity and dated yield rather than relying on a general claim about which security type pays most. Rates and yields vary by offering.
- Select an access route. Use TreasuryDirect for a noncompetitive auction bid, or contact a bank, broker, or dealer about auction or secondary-market access. TreasuryDirect’s Buying a Treasury Marketable Security page explains purchase routes.
- Confirm the purchase terms before placing an order. TreasuryDirect lists a $100 minimum for bills and notes, with purchases in $100 increments. Verify current rules and any intermediary-specific minimums or charges before buying. Do not assume that every platform uses TreasuryDirect’s minimum or has the same fee schedule.
- Plan for maturity or an early sale. If you may need the money before maturity, understand how to sell through your chosen route and that the price may differ from face value. If you hold to maturity, principal is repaid according to the security’s terms.
Taxes and how Treasuries differ from savings bonds
TreasuryDirect’s product pages state that federal tax applies to interest earned on bills and notes, while the bill page says state and local taxes do not apply. Treat this as general product-page guidance, not personal tax advice; verify reporting and tax treatment for your own circumstances with an appropriate tax professional or official tax guidance. These statements should not be read as individualized advice about a particular investor’s tax return.
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Bills, notes, and bonds are marketable securities: they can be bought and sold, including in the secondary market. They are not the same as savings bonds, which TreasuryDirect distinguishes as a different type of Treasury product that generally cannot be sold or transferred in the same way. If you are comparing Treasury products, make sure the product you mean is a marketable bill, note, or bond rather than a savings bond. The terms and ways to access them are not interchangeable. See About Treasury Marketable Securities.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A quick decision checklist
Use these questions to narrow the choice before placing an order:
- When do I expect to need the principal? If it is within a year, compare bill maturities from 4 through 52 weeks. For longer horizons, compare note terms of 2 to 10 years or bond terms of 20 or 30 years against the actual date you expect to need the money.
- Do I want payments along the way? Notes and bonds pay interest every six months. Bills pay their return at maturity.
- Could I need to sell early? Marketable Treasuries can be sold before maturity, but the market price may differ from face value. This is particularly relevant when selecting a maturity that extends well beyond your expected cash need.
- Have I checked the actual offering? Compare current, dated auction information for the specific terms you are considering. Do not rely on an outdated yield or a permanent claim that one category pays more.
- Have I checked the purchase route? TreasuryDirect lists a $100 minimum for bills and notes in $100 increments. Intermediaries may have their own current requirements, fees, and order procedures.
These questions do not predict future yields or market prices. They help separate the product features that are known in advance—term and payment schedule—from the market price you might receive if you sell before maturity.
Frequently Asked Questions
Which Treasury security is most suitable if I need the money soon?
Compare the date you expect to need the money with bill maturities, which range from 4 to 52 weeks. If the cash date is earlier than the bill’s maturity, account for the possibility of selling at a market price that differs from face value.
Which one 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 security before it matures?
Yes. Marketable Treasuries may be sold before maturity, but the sale price may be above or below face value. The price relationship to face value matters if you sell a note or bond before maturity.
Which currently has the highest yield?
There is no permanent winner. Compare current, dated auction results for the actual maturities you are considering; yields vary by offering.
Are Treasury bills, notes, and bonds the same as savings bonds?
No. Bills, notes, and bonds are marketable securities that can be bought or sold, including in the secondary market. TreasuryDirect distinguishes savings bonds as a different product that generally cannot be sold or transferred in the same way.
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What is the minimum TreasuryDirect purchase?
TreasuryDirect lists a $100 minimum for bills and notes, with purchases in $100 increments. Check current terms and confirm the minimums and any fees of a bank, broker, or dealer directly.
Are Treasury securities guaranteed to keep their value if I sell early?
No. TreasuryDirect describes the U.S. government’s full faith and credit as backing timely contractual interest and principal payments. That does not guarantee that an investor selling before maturity will receive face value or avoid a market-price loss.
How are Treasury bills taxed?
TreasuryDirect’s bill page says federal tax applies to interest and state and local taxes do not apply. This is general product-page guidance, not individualized tax advice; check official guidance or a tax professional for your own reporting needs.
The Bottom Line
Choose the maturity that best matches when you expect to need the principal, then consider whether you want semiannual interest. Bills mature in 4 to 52 weeks and pay their return at maturity; notes run 2 to 10 years and bonds 20 or 30 years, both paying interest every six months. If you might sell early, account for market-price risk and compare dated auction information for the specific offerings rather than looking for a permanent yield winner.
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