The main difference between Treasury bills, notes and bonds is how long they run and when they pay interest. Bills mature in 4 to 52 weeks and generally deliver their return at maturity; notes run 2 to 10 years and bonds run 20 or 30 years, with both paying interest every six months. The right comparison is maturity, cash-flow timing and the possibility of a different sale price if you exit early—not a guarantee that one type will earn more.
How bills, notes and bonds compare
TreasuryDirect classifies all three as marketable Treasury securities. Their terms and payment schedules differ:
| Security | TreasuryDirect term | How returns are paid | Typical role in a comparison |
|---|---|---|---|
| Treasury bills | 4, 6, 8, 13, 17, 26 or 52 weeks | Usually bought at a discount or at par; the face value is paid at maturity. The difference between the purchase price and face value is the bill’s interest. | Shorter maturity; no periodic coupon 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 maturity with periodic interest. |
| Treasury bonds | 20 or 30 years | Interest is paid every six months; principal is paid at maturity. | Long maturity, with greater exposure to market-price changes if sold early. |
These are TreasuryDirect product terms, not a forecast of returns. See its pages on Treasury bills, Treasury notes and Treasury bonds.
How interest is paid
Treasury bills: return at maturity
A bill does not make the regular six-month interest payments associated with notes and bonds. It is commonly purchased for less than its face value, then pays the face value at maturity. That difference is the interest earned; bills may also be sold at par. TreasuryDirect describes the bill’s purchase and maturity mechanics on its bill page.
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Treasury notes and bonds: interest twice a year
Notes and bonds pay interest every six months, then return principal at maturity. Their coupon rate is set at auction. The payment schedule can matter if you want cash flow during the holding period, while a bill’s return is generally realized when it matures.
What happens if you sell before maturity?
You can sell marketable Treasury securities before they mature, but the sale occurs at the prevailing market price. You may receive less or more than the principal amount due at maturity. TreasuryDirect explains that marketable securities can be sold early in About Treasury Marketable Securities.
For a fixed-rate note or bond, the market price is related to its coupon rate and yield to maturity:
- If yield to maturity is above the security’s coupon rate, its price is below face value.
- If yield to maturity equals the coupon rate, its price is at face value.
- If yield to maturity is below the coupon rate, its price is above face value.
TreasuryDirect defines yield to maturity as “the annual rate of return on the security” and explains this relationship in Understanding Pricing and Interest Rates. A longer maturity can mean more exposure to price changes when market yields move; it does not establish that the security will deliver a higher return.
Which differences matter when comparing them?
- When you may need the money: Compare the maturity date with your time horizon. If you might need to sell sooner, account for the possibility that the market price will differ from the amount due at maturity.
- When you want cash flow: Bills generally pay their value at maturity, while notes and bonds send interest payments every six months.
- How much price movement you can accept: Longer maturities can be more exposed to market-price changes as yields move. This is a price-risk consideration, not a prediction of future prices.
- How you want to buy or trade: Auction access and secondary-market trading depend on the purchase channel.
These are comparison factors, not individualized advice or evidence that one security is suitable for every investor. Current yields and market prices change; the term and payment information above does not rank today’s opportunities.
Where to buy Treasury securities
TreasuryDirect says marketable securities are available through Treasury auctions or in the secondary market. Its FAQ identifies TreasuryDirect as a route for noncompetitive auction bids and brokers, dealers or financial institutions as other purchase channels. Access, fees and order workflows can vary by channel, so check the relevant terms before placing an order. See TreasuryDirect’s FAQs About Treasury Marketable Securities.
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A Treasury bond is not a savings bond
“Treasury bond” refers to a marketable security with a 20- or 30-year term. U.S. Savings Bonds are a different product, so the terms should not be used interchangeably.
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