Where to buy government bonds

You can buy U.S. government bonds in two main ways: directly from the U.S. Department of the Treasury through TreasuryDirect, or through a bank or brokerage firm. TreasuryDirect is free and holds your bonds electronically. A broker charges a commission but may offer more bond types and faster transactions. Most individual buyers start with TreasuryDirect because there are no fees and the process is straightforward.

TreasuryDirect is an online platform run by the Bureau of the Fiscal Service. You create an account, link a bank account, and purchase bonds directly. A brokerage account works differently — you fund the account first, then place bond orders through their platform. Both routes lead to the same U.S. government bonds; the difference is who holds them and what you pay to buy them.

Key Takeaways

  • TreasuryDirect lets you buy bonds directly from the U.S. Treasury with no fees, but you must set up an online account and link a bank account first.
  • Treasury bonds, notes, and bills are sold at auction on a fixed schedule — you cannot buy them at any time, only during the auction window.
  • You can bid competitively (accepting whatever rate the auction sets) or non-competitively (paying the average rate that wins), and non-competitive bids almost always succeed.
  • Bonds held in TreasuryDirect are registered to you and cannot be sold before maturity without moving them to a brokerage account first.
  • A broker charges a commission but lets you buy bonds between auctions and sell before maturity without extra steps.

Setting up a TreasuryDirect account

Go to treasurydirect.gov and click "Open an Account." You will need a Social Security number, email address, and a U.S. bank account. The site will ask you to create a username and password, then verify your identity by answering security questions based on your credit history. This verification is when ready.

Once your account is open, you link a bank account for funding purchases and receiving proceeds when bonds mature or are sold. You can link a checking or savings account from any U.S. bank. TreasuryDirect will make two small test deposits to that account within a few days — you then log in and confirm the amounts to prove you own the account. After confirmation, your account is fully active and you can bid on bonds.

Understanding the auction schedule and bid types

The Treasury holds auctions on a regular schedule. Treasury bills (short-term bonds maturing in a few weeks to one year) auction weekly. Treasury notes (two to ten years) auction monthly. Treasury bonds (20 and 30 years) auction less frequently. You can see the full schedule on treasurydirect.gov under "Upcoming Auctions."

When you bid, you choose between a competitive bid and a non-competitive bid. A competitive bid means you name the interest rate you will accept — if the auction rate is higher, your bid fails and you get no bonds. A non-competitive bid means you accept whatever rate the auction sets, and your bid almost always succeeds. Most individual buyers use non-competitive bids because they are simpler and nearly certain to go through. You place your bid during the auction window (usually several days before the auction date), and the Treasury processes all bids on the auction date itself.

Placing your first bond purchase

Log into your TreasuryDirect account and click "Buy Direct." Select the bond type (bill, note, or bond) and the maturity date you want. Enter the dollar amount — the minimum is $100, and you can buy in $100 increments up to $5 million per auction. Choose "Non-Competitive Bid" unless you have a specific rate in mind. Review your order and confirm.

The money will be withdrawn from your linked bank account on the auction date. You will receive a confirmation email with your purchase details. Your bonds then appear in your account as "Holdings." You can view them anytime, but you cannot sell them through TreasuryDirect — they are locked in until maturity. If you need to sell before maturity, you must move the bonds to a brokerage account first, which takes a few days and may involve a small fee.

Buying bonds through a broker

Open an account at a bank or brokerage — common choices include Fidelity, Charles Schwab, Vanguard, and most traditional banks. You will need to provide identification, Social Security number, and bank details for funding. After your account is approved, deposit money and you are ready to buy.

Brokers let you buy bonds in two ways: place an order during an auction (similar to TreasuryDirect but through their platform), or buy bonds on the secondary market between auctions. Secondary market purchases mean you are buying from another investor, not from the Treasury, so the price and interest rate reflect what that investor is willing to sell for. Brokers charge a commission per trade — this ranges widely but is often $1 to $10 per bond for individual investors. Ask your broker for their fee schedule before you buy.

What happens when your bond matures

On the maturity date, the Treasury pays you the face value of the bond plus any final interest payment. If you hold the bond in TreasuryDirect, the money is deposited into your linked bank account automatically. If you hold it through a broker, the proceeds land in your brokerage account as cash, which you can withdraw or reinvest.

You do not have to do anything — the payment happens automatically. If you want to buy another bond with the proceeds, you straightforward place a new order. Many investors set up a ladder of bonds maturing at different times so they have regular cash coming in and can reinvest at new rates as bonds mature.

Moving bonds between TreasuryDirect and a broker

If you buy a bond in TreasuryDirect and later decide you want to sell it before maturity, you must move it to a brokerage account first. This is called a transfer to a broker. Log into TreasuryDirect, select the bond, and request the transfer. You will need to provide your broker's account details. The transfer takes a few business days, and your broker may charge a small fee (often $25 to $50).

Once the bond is in your brokerage account, you can sell it on the secondary market anytime. You can also move bonds from a broker back to TreasuryDirect, though this is less common. The process is similar — you request the transfer through your broker and provide your TreasuryDirect account information.

Frequently Asked Questions

Can I buy government bonds with less than $100?

No. TreasuryDirect and most brokers require a minimum of $100 per purchase, and you must buy in $100 increments. Some brokers may have different minimums, so check with them directly.

What if I miss an auction date?

You can wait for the next auction — the Treasury holds them on a regular schedule. If you want to buy bonds between auctions, you can purchase them on the secondary market through a broker, though the price may be higher or lower than face value depending on interest rates.

Do I pay taxes on government bond interest?

Yes. Interest from U.S. Treasury bonds is subject to federal income tax but exempt from state and local income tax. You will receive a Form 1099-INT each year showing the interest you earned, which you report on your tax return.

Can I sell a bond before it matures?

Only through a broker on the secondary market. If your bond is in TreasuryDirect, you must transfer it to a broker first. The sale price depends on current interest rates — if rates have risen since you bought, your bond will sell for less than you paid.

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

The main difference is how long you hold them. Bills mature in less than a year, notes mature in two to ten years, and bonds mature in 20 or 30 years. Longer-term bonds typically pay higher interest rates to compensate for the longer wait.