You can buy U.S. government bonds directly from the Treasury, through a brokerage firm, or from a bank
The route you choose depends on whether you want the lowest cost, the most convenience, or access to older bonds that are no longer being issued. The Treasury's own platform, TreasuryDirect, charges no fees and lets you hold bonds in a government account. A brokerage firm like Fidelity, Charles Schwab, or E*TRADE charges a commission but gives you more flexibility to sell before maturity. A bank can order bonds for you but typically charges a higher fee than a broker.
Each method works the same way at the end: you send money, the Treasury issues you a bond, and you receive interest payments on a set schedule. The difference is in cost, speed, and what happens if you need to sell before the bond matures.
Key Takeaways
- TreasuryDirect is the Treasury's own website and charges zero fees, but you can only buy new bond issues and cannot sell before maturity without moving the bond to a brokerage first.
- Brokerages charge a commission per trade (usually $1 to $25 depending on the firm) but let you buy newly issued bonds, older bonds from other investors, and sell whenever you want.
- Banks can order bonds for you but typically charge higher fees than brokerages and offer fewer bond types.
- All three routes connect to the same Treasury system, so the bond itself is identical regardless of where you buy it.
- You need a Social Security number or tax ID, a bank account for deposits and withdrawals, and an online account with whichever seller you choose.
Buying directly through TreasuryDirect
TreasuryDirect (treasurydirect.gov) is the U.S. Treasury's own platform for selling bonds to the public. You create an account, link a bank account, and buy bonds with no fees. The Treasury holds your bonds in an electronic account and sends interest payments directly to your bank on the scheduled dates.
TreasuryDirect works best if you plan to hold a bond until it matures and do not need to sell early. You can buy Treasury bills (short-term, up to one year), Treasury notes (two to ten years), Treasury bonds (20 or 30 years), and I Bonds (savings bonds with inflation protection). You cannot buy bonds that were issued in the past — only new issues that the Treasury is currently selling.
The main limitation is that selling before maturity is cumbersome. You cannot sell directly on TreasuryDirect. Instead, you must transfer the bond to a brokerage account first, which takes several days, and then sell it on the secondary market. This process defeats the purpose of using TreasuryDirect if you think you might need the money sooner.
Buying through a brokerage firm
A brokerage is a financial company that buys and sells securities on your behalf. Major brokerages include Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, and Vanguard. You open an account, deposit money, and place an order for the bond you want. The brokerage charges a commission, usually between $1 and $25 per trade depending on the firm and the type of bond.
Brokerages give you access to both newly issued bonds and older bonds that other investors are selling. This means you can buy a 10-year Treasury note that was issued five years ago and still has five years left to maturity, or a brand-new one. You can also sell your bond at any time before maturity if you need the money — the brokerage will find a buyer on the secondary market and deposit the proceeds into your account within a few business days.
The trade-off is cost. A $10,000 bond purchase through a brokerage might cost $10 to $25 in commission, whereas TreasuryDirect costs nothing. Over many purchases, this adds up. However, if you think you might sell before maturity or want access to a specific older bond, the flexibility is worth the fee for most investors.
Buying through a bank
Most banks offer to order government bonds for you as a service. You visit a branch or call the bank's bond desk, tell them what you want to buy, and they place the order through their own systems. The bank charges a fee, typically $25 to $50 per transaction, and may require a minimum purchase amount.
Banks are convenient if you already have a relationship with them and prefer to do business in person or over the phone. However, they usually offer fewer bond types than a brokerage, and their fees are higher. Banks also rarely offer secondary-market bonds (older bonds from other investors), so you are limited to new issues.
For most people, a brokerage is a better choice than a bank because the fees are lower and the selection is wider. Banks make sense only if you strongly prefer phone or in-person service and do not mind paying extra for it.
Comparing cost and access across the three routes
| Route | Cost per purchase | New bonds only? | Can sell before maturity? | Best for |
|---|---|---|---|---|
| TreasuryDirect | $0 | Yes | No (requires transfer to broker first) | Buy-and-hold investors who want zero fees |
| Brokerage | $1–$25 | No (access to secondary market) | Yes | Investors who may sell early or want older bonds |
| Bank | $25–$50 | Yes | Rarely | Investors who prefer in-person service |
What you need to open an account and buy
Regardless of which route you choose, you will need a Social Security number or Individual Taxpayer Identification Number (ITIN), a U.S. bank account, and an email address. The Treasury and brokerages use these to verify your identity and set up electronic deposits and withdrawals.
You will also need to decide how much to invest. Treasury bills, notes, and bonds are sold in $100 increments, so the minimum purchase is typically $100. I Bonds have a $25 minimum. There is no maximum, but some brokerages or banks may set their own limits.
When you place an order, you specify the amount, the type of bond, and the maturity date (if multiple options are available). The seller deducts the money from your bank account, the Treasury issues the bond, and you begin receiving interest payments on the scheduled dates. The entire process usually takes three to five business days from order to settlement.
Understanding the secondary market and older bonds
The secondary market is where investors buy and sell bonds that have already been issued. When you buy a bond through a brokerage that was issued two years ago, you are buying it from another investor, not from the Treasury. The price may be higher or lower than the original issue price depending on interest rates and the bond's remaining time to maturity.
TreasuryDirect does not connect to the secondary market — it only sells new issues. Brokerages do, which means you can find bonds with specific maturity dates or interest rates that suit your needs. This flexibility is valuable if you are building a bond ladder (a strategy where you buy bonds that mature at different times) or if you want a bond that matures in exactly three years rather than waiting for the Treasury to issue one.
Secondary-market bonds are priced by supply and demand, so you may pay a premium or get a discount compared to par value (the face amount). A broker can show you the current price before you buy, so you know exactly what you are paying.
Frequently Asked Questions
Do I have to use TreasuryDirect, or can I use any of these three routes?
You can use any of them. TreasuryDirect is the cheapest if you never sell before maturity. A brokerage is more flexible and costs only slightly more per trade. A bank is the most expensive but offers personal service. Choose based on your plan: if you are holding to maturity and want zero fees, use TreasuryDirect. If you might sell early or want older bonds, use a brokerage.
What happens if I buy a bond through a brokerage and then want to move it to TreasuryDirect?
You cannot move a bond from a brokerage to TreasuryDirect. TreasuryDirect only holds bonds you buy directly through it. If you buy through a brokerage, the bond stays in your brokerage account. You can sell it on the secondary market at any time, but you cannot transfer it to TreasuryDirect.
Are government bonds bought through a brokerage the same as bonds bought through TreasuryDirect?
Yes. The bond itself is identical — it is issued by the U.S. Treasury and backed by the same may provide. The only difference is where you hold it and how much you paid to buy it. A $10,000 Treasury note is a $10,000 Treasury note regardless of whether you bought it through TreasuryDirect, a brokerage, or a bank.
Can I buy bonds for someone else, like a child or grandchild?
Yes, but the account must be in their name and Social Security number. You can fund it with your money, but the bond is registered to them. For minors, you typically set up a custodial account with a brokerage or use a parent or guardian's TreasuryDirect account. Ask your chosen seller about their rules for accounts held by minors.
What if I want to sell my bond before maturity but do not have a brokerage account?
If you bought through TreasuryDirect, you will need to open a brokerage account and transfer the bond there first. This takes several days. If you bought through a bank, ask the bank whether they can sell it for you on the secondary market — some will, for an additional fee. A brokerage is the fastest route to sell because the bond is already there.