The main difference is how long your money is committed and when you receive interest: Treasury bills mature in 4 to 52 weeks and generally 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 any of these marketable securities before maturity, the price you receive can be higher or lower than the amount due at maturity.
How bills, notes, and bonds compare
TreasuryDirect groups bills, notes, and bonds as marketable U.S. Treasury securities. Their defining differences are maturity and payment pattern—not a promise that one will earn more than another.
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| Security | TreasuryDirect term | How returns are paid | What the term means in practice |
|---|---|---|---|
| Treasury bills | 4, 6, 8, 13, 17, 26, or 52 weeks | Usually sold at a discount or at par. At maturity, the investor receives face value; the difference between the purchase price and face value is the interest. | Short-term security with no periodic interest payment. |
| Treasury notes | 2, 3, 5, 7, or 10 years | Fixed interest rate set at auction, paid every six months; principal is paid at maturity. | Intermediate-term security with regular interest payments. |
| Treasury bonds | 20 or 30 years | Interest paid every six months; principal is paid at maturity. | Long-term security whose market price can be more exposed to changes in interest rates if sold before maturity. |
These terms and payment descriptions are TreasuryDirect product specifications, not forecasts of returns. See Treasury bills, Treasury notes, and Treasury bonds.
How each security pays
Treasury bills: return at maturity
A bill does not make the twice-yearly coupon payments associated with notes and bonds. It is generally purchased for less than its face value, then pays face value at maturity. That gap is the bill’s interest. Treasury bills may also be sold at par, so the discount is typical rather than universal. TreasuryDirect explains the bill payment structure on its Treasury bills page.
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Treasury notes and bonds: interest every six months
Notes have a fixed interest rate established at auction and pay interest every six months; bonds also pay interest every six months. Both return principal at maturity. The longer bond terms distinguish them from notes. TreasuryDirect describes these payment terms on its notes page and bonds page.
What happens if you sell before maturity
Treasury marketable securities can be sold before they mature, but an early sale takes place at the market price then available. You could receive less or more than the principal payable at maturity; the amount is not fixed simply because the security is issued by the U.S. Treasury. TreasuryDirect notes that these securities can be sold before maturity in its overview of Treasury marketable securities.
For fixed-rate notes and bonds, TreasuryDirect relates price to yield to maturity and the security’s coupon rate:
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- If the yield to maturity equals the coupon rate, the price is at face value.
- If the yield to maturity is below the coupon rate, the price is above face value.
In other words, the fixed payments on an existing security become more or less attractive as market yields change, affecting what another buyer may pay. TreasuryDirect defines yield to maturity as the annual rate of return on the security and explains the pricing relationship in Understanding Pricing and Interest Rates.
Which differences matter when comparing them
- When you may need the money: Compare the maturity with your time horizon. Selling early is possible, but the market price may not equal the principal due at maturity.
- How you want to receive cash flow: Bills generally pay their return through the face-value payment at maturity. Notes and bonds pay interest twice a year.
- How much price movement you can tolerate: Longer maturities can be more exposed to price changes when market yields move. This is a consideration if you might sell early, not a prediction of future prices.
- What return you are comparing: A maturity category alone does not determine which security has the better return. Auction terms or, in the secondary market, the price you pay affect the yield.
These comparisons clarify the tradeoffs; they do not establish which security is appropriate for a particular investor. Current yields and prices change, and no current yield ranking is implied here.
Where investors can buy Treasury securities
TreasuryDirect says marketable securities may be bought at Treasury auctions or in the secondary market. Its FAQ identifies TreasuryDirect as a channel for noncompetitive auction bids, and brokers, dealers, or financial institutions as other purchase channels. Access and order processes depend on the channel; consult the relevant provider for its fees and available services. See Treasury marketable securities and Treasury marketable securities FAQs.
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A Treasury bond is not a savings bond
“Treasury bond” refers here to a marketable security with a 20- or 30-year term. U.S. Savings Bonds are a different Treasury product, so the terms should not be used interchangeably. TreasuryDirect describes the marketable Treasury bond on its Treasury bonds page.
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