The Tool Desk
Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Choose among Treasury bills, notes, and bonds by matching the security’s maturity and payment schedule to when you need the money—not by assuming one always offers the best return. Bills mature in 4 to 52 weeks and pay their return at maturity; notes mature in 2 to 10 years and bonds in 20 or 30 years, with both paying interest every six months. If you might sell early, the market price can be above or below face value.
How the three Treasury securities differ
| Security | Terms | How return is paid | Minimum purchase |
|---|---|---|---|
| Treasury bills | 4, 6, 8, 13, 17, 26, or 52 weeks | Sold at face value or at a discount; at maturity, you receive face value. The difference between your purchase price and face value is the return. | $100, in $100 increments |
| Treasury notes | 2, 3, 5, 7, or 10 years | Fixed rate set at auction; interest paid every six months. | $100, in $100 increments |
| Treasury bonds | 20 or 30 years | Interest paid every six months. | $100, in $100 increments |
Terms, payment schedules, and minimums are Treasury specifications. See TreasuryDirect’s bill, note, and bond pages and its marketable securities overview.
Which one fits your time horizon?
If you expect to use the money within a year
Consider a bill with a maturity date near the date you expect to need the funds. Bills do not send periodic coupon payments; you receive face value at maturity. If you reinvest the proceeds, the rate available for the next bill may be different.
If you want periodic interest over a medium-term horizon
Consider a note if its 2- to 10-year maturity fits your plans and semiannual payments suit your cash-flow needs. Its rate is fixed at auction. The Treasury describes the schedule this way: “Notes pay a fixed rate of interest every six months until they mature.” TreasuryDirect
Quick wins for a faster PC:
Scan for outdated or missing drivers - takes under a minuteDriver Scan →Repair Windows errors before they cause bigger problemsFix Now →#1 Best Overall
If you want periodic interest over a long horizon
A bond may fit an investor who can commit money for 20 or 30 years and wants interest every six months. A longer maturity also means greater sensitivity to changing market yields if you sell before maturity; the resale price can move more than that of a shorter-term security when yields change.
What happens if you sell before maturity?
Bills, notes, and bonds are marketable Treasury securities: they can be transferred and sold before maturity. Marketable does not mean an early sale returns face value. Notes and bonds can trade above or below par as market yields change relative to the security’s coupon rate. TreasuryDirect explains that a note or bond’s price is below par when its yield to maturity is above its coupon rate, and above par when its yield is below its coupon rate. TreasuryDirect pricing explanation
That creates a practical trade-off: holding to maturity avoids having to accept a market sale price, while selling early exposes you to the price available at that time. Longer-term bonds generally have more price sensitivity, so they may be a poor match for money you could need unexpectedly.
How to buy, and what to check before placing an order
Treasury securities are sold at public auction. TreasuryDirect accepts noncompetitive bids; banks, brokers, and dealers can accept competitive and noncompetitive bids. You can also buy securities in the secondary market. TreasuryDirect purchase scheduling does not lock in an auction rate in advance. Auction information · Buying marketable securities
- Set the time horizon. Identify when you expect to use the money, and avoid choosing a maturity that conflicts with that date unless you are willing to sell early.
- Choose the cash-flow pattern. Bills pay the return at maturity; notes and bonds pay interest every six months.
- Check the current auction terms and yield. Rates are set at auction and change over time. A scheduled TreasuryDirect purchase is not a guaranteed rate quote.
- Compare purchase price and yield if buying in the secondary market. For notes and bonds, the coupon alone does not tell you the yield to maturity or whether you are paying above or below par.
- Choose an access route. TreasuryDirect is one option; banks, brokers, and dealers provide auction access, and secondary-market purchases are also available. Compare any intermediary’s fees and terms.
TreasuryDirect states that bills, notes, and bonds are federally taxable and exempt from state and local taxes. Consult its product pages for the relevant security details: bills, notes, and bonds.
Do not confuse Treasury bonds with savings bonds
Treasury bills, notes, and bonds discussed here are marketable securities. U.S. Savings Bonds are a different, nonmarketable product; they are not another name for Treasury bonds. See TreasuryDirect’s marketable securities information.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A quick decision framework
- Money needed within a year: Start by matching a bill’s term to the expected date you need the money.
- Medium-term investment with semiannual interest: Compare notes whose maturity matches your horizon.
- Long-term investment with semiannual interest: Consider whether a 20- or 30-year bond’s duration and early-sale price risk are acceptable.
- Uncertain need for the money: Favor a maturity you can hold to, or account for the possibility that an early sale could be below face value.
These are structural differences, not a ranking of returns. Compare current auction yields separately, and weigh yield, purchase price, maturity, and payment timing together.
Quick Recap
Best Value
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
