You can buy government bonds directly from the U.S. Treasury or through a bank or brokerage

Government bonds are loans you make to the federal government. When you buy one, you lend money to the Treasury, and they pay you back with interest after a set period. You can purchase them directly from the Treasury Department through a website called TreasuryDirect, or you can buy them through a bank, credit union, or investment brokerage.

The direct route through TreasuryDirect is simpler and has no fees. The brokerage route gives you more flexibility and lets you sell before maturity, but you pay a commission. Both routes are straightforward once you understand the mechanics.

Key Takeaways

  • TreasuryDirect is a free government website where you can buy Treasury bonds, bills, and notes directly without a middleman or fees.
  • You need a bank account and a Social Security number to open a TreasuryDirect account, and you can start with as little as $100.
  • Treasury bonds mature at different times — bills mature in weeks or months, notes in two to ten years, and bonds in twenty or thirty years — and you choose which one fits your timeline.
  • If you buy through a bank or brokerage instead of TreasuryDirect, you pay a commission but gain the ability to sell before the bond matures.
  • Interest payments arrive in your bank account twice a year, and when the bond matures, the Treasury returns your full principal automatically.

Opening a TreasuryDirect account

Start by going to TreasuryDirect.gov and clicking "Open an Account." You will need your Social Security number, a valid email address, and a U.S. bank account (checking or savings). The site will verify your identity using information from your credit file, similar to opening a bank account online.

Once your account is open, you link a bank account for deposits and withdrawals. This is where the Treasury will send your interest payments twice a year, and where they will return your principal when the bond matures. You can link multiple accounts if you want, but you need at least one to get your free guide.

The whole process takes about fifteen minutes. You do not need a minimum balance to maintain the account, and there are no monthly or annual fees.

Choosing which Treasury security to buy

The Treasury sells three main types of securities, and they differ only in how long you lend the money:

  • Treasury bills (T-bills) mature in four weeks, thirteen weeks, twenty-six weeks, or fifty-two weeks. You lend money for less than a year.
  • Treasury notes mature in two, three, five, seven, or ten years. These are the middle ground.
  • Treasury bonds mature in twenty or thirty years. You lend money for decades.

The longer you lend money, the higher the interest rate (called the yield) the Treasury offers you. A thirty-year bond pays more than a two-year note. The trade-off is that your money is locked up longer, and if you need to sell before maturity, you might have to sell at a loss if interest rates have risen.

If you plan to hold until maturity and do not need the money, the longer the term, the better the return. If you might need the money sooner, stick with shorter terms.

Making your first purchase through TreasuryDirect

Log into your TreasuryDirect account and click "Buy Securities." You will choose the type (bill, note, or bond), the maturity date, and the amount. The minimum purchase is $100, and you can buy in $100 increments after that.

You will see the current yield before you confirm. This is the interest rate you will earn, locked in for the life of the security. Once you confirm and the Treasury processes your order (usually within one business day), the money is withdrawn from your linked bank account and your security appears in your account.

TreasuryDirect auctions new securities on a regular schedule. Bills are auctioned weekly, notes and bonds monthly. You can place a bid anytime during the auction window, and the Treasury will fill your order at the auction price.

Buying bonds through a bank or brokerage

If you have a brokerage account (at firms like Fidelity, Charles Schwab, or Vanguard) or a bank that offers bond trading, you can buy Treasury securities there instead. The process is similar to buying a stock: you search for the security, enter the quantity, and confirm the purchase.

The main advantage is flexibility. You can sell your bond before it matures if you need the money, whereas TreasuryDirect requires you to hold until maturity (with limited exceptions). The main disadvantage is cost: brokerages charge a commission, usually between $1 and $10 per transaction, and the price you pay may be slightly higher than the face value.

Brokerages also offer older Treasury securities that are no longer being issued by the Treasury but are still trading between investors. This gives you more options, but it also means you need to understand bond pricing and yields, which is more complex than buying new securities directly.

Understanding how interest payments work

When you own a Treasury security, you receive interest payments twice a year. The Treasury deposits the payment directly into your linked bank account on the maturity date of each payment period. For example, if you buy a ten-year note in January, you might receive payments in January and July each year for ten years.

The interest rate is set at the auction and does not change. A ten-year note bought at 4.5% will pay 4.5% every year until maturity, regardless of what happens to interest rates in the market. This predictability is one reason people buy Treasury securities — you know exactly what you will earn.

When your security matures, the Treasury sends your full principal (the amount you originally lent) back to your bank account along with the final interest payment. You do not have to do anything; it happens automatically.

What happens if you need to sell before maturity

If you bought through TreasuryDirect, you cannot sell back to the Treasury before maturity. You can only sell on the secondary market (the market where existing bonds trade between investors), and to do that you need to transfer the security to a brokerage account first. This process takes a few days and may involve a fee.

If you bought through a brokerage, you can sell anytime during market hours. The price you receive depends on current interest rates. If rates have risen since you bought, your bond is worth less (because new bonds pay higher rates). If rates have fallen, your bond is worth more. This is why holding to maturity removes the risk of selling at a loss.

Most individual investors buy Treasury securities to hold to maturity, so the ability to sell early is less important than it sounds. But it is worth understanding in case your situation changes.

Frequently Asked Questions

What is the minimum amount I need to invest in Treasury bonds?

Through TreasuryDirect, the minimum is $100, and you can buy in $100 increments. Through a brokerage, the minimum is usually $1,000 per bond, though some brokerages allow smaller amounts. Check with your brokerage for their specific rules.

Are Treasury bonds safe?

Treasury securities are backed by the full faith and credit of the U.S. government, making them among the safest investments available. The risk of the government defaulting is extremely low. The main risk is interest rate risk: if you sell before maturity and rates have risen, you will receive less than you paid.

Can I buy Treasury bonds in a retirement account like an IRA?

Yes. You can hold Treasury securities in a traditional IRA, Roth IRA, or other retirement account through a brokerage. TreasuryDirect accounts cannot be retirement accounts, so if you want to hold Treasuries in an IRA, you must buy through a brokerage.

How do I know what interest rate I will get?

The interest rate is determined at auction and is announced before you buy. When you place your order on TreasuryDirect or through a brokerage, you will see the yield before you confirm. That rate is locked in for the life of the security.

What is the difference between buying a Treasury bill and a Treasury note?

The only difference is the maturity date. Bills mature in less than a year, notes in two to ten years, and bonds in twenty or thirty years. Longer maturities pay higher yields. Choose based on when you think you will need the money and what yield you want.