To buy Treasury bonds, you open a TreasuryDirect account with the U.S. government or use a bank or brokerage account, then submit a noncompetitive bid at one of the regularly scheduled Treasury auctions or pick up an existing bond on the secondary market. The minimum purchase is $100, and bonds come in 20-year and 30-year terms paying fixed interest every six months. Because they carry the full backing of the federal government, Treasury bonds are among the lowest-risk investments available, though their long maturities mean the market price can swing significantly when interest rates change.
The Two Places to Buy
You have two practical options. TreasuryDirect is the government’s own platform and lets you buy new bonds straight from the source with no fees. A brokerage account lets you buy at auction alongside your other investments and also gives you access to the secondary market, where previously issued bonds trade at current prices. The mechanics differ, and so does what happens if you want to sell before maturity.
Opening a TreasuryDirect Account
Before you can place an order on TreasuryDirect, you need to register. The site asks for:
- Your Social Security Number or Taxpayer Identification Number, which links the account to your tax profile so interest gets reported correctly.
- A U.S. bank account, with both the account number and the nine-digit ACH routing number. The account must accept ACH transfers.
- An email address for account notifications.
The name on the bank account has to match the name on your TreasuryDirect application. A mismatch can trigger administrative holds or outright rejection by the Bureau of the Fiscal Service. Check the routing number carefully; using the number from a deposit slip instead of the ACH routing number is a common cause of delay.
Trusts, estates, and other entities can open accounts too, but that path requires an Employer Identification Number, an IRS Name Control, and authority to act as the entity account manager.
Once you submit your information, the site walks you through creating a password and security questions. Most applicants get an account number by email shortly after registering. If the system can’t verify your identity online, you’ll be asked to complete FS Form 5444 and have a certifying officer at a bank or credit union sign and seal it. Notary certification is not accepted for that form.
Placing an Order on TreasuryDirect
Once your account is active and an auction is open, the purchase itself takes only a few clicks:
- Log in and open the BuyDirect tab.
- Select “Bonds” and choose the 20-year or 30-year term.
- Enter the amount you want to buy, in $100 increments.
- Pick the linked bank account that will fund the purchase.
- Review the details and submit your noncompetitive bid.
You won’t know the exact interest rate at the moment you bid. Auction results are posted after 5 PM Eastern on auction day, and you can see the rate and price in your account under Pending Purchases and Reinvestments. The purchase amount is debited from your bank account, and the bond is generally issued to your account within a week of the auction. Everything is electronic; there are no paper certificates.
Buying Through a Broker
If you already use a brokerage account, buying Treasury bonds there keeps them alongside your other holdings. Brokers offer two routes:
- New-issue auctions. Many brokers let you submit noncompetitive bids for upcoming Treasury auctions through their platform. The process mirrors TreasuryDirect: pick the security, enter the amount, accept the auction-determined rate.
- Secondary market purchases. You can buy previously issued Treasury bonds from other investors at current market prices, which lets you choose specific coupon rates or remaining maturities.
Most major brokerages have eliminated commissions for online Treasury trades, though some apply a small markup to the price on secondary market purchases. You can filter available bonds by maturity date and coupon rate, or look up a specific issue by its CUSIP number. Interest payments deposit into your brokerage cash balance on each semiannual payment date.
How the Auction and Noncompetitive Bidding Work
Treasury bonds aren’t sold on demand like stocks. The government sells them through scheduled auctions. Original-issue auctions for 20-year and 30-year bonds typically happen in February, May, August, and November, with reopenings of existing issues in most other months.
Individual investors almost always use noncompetitive bids, which is the only bid type available through TreasuryDirect. With a noncompetitive bid, you agree to accept whatever interest rate the auction produces, and in exchange you’re guaranteed the full amount you asked for. You can bid anywhere from $100 up to $10 million per auction this way. Competitive bidding, where you specify a yield and risk being shut out, must go through a bank, broker, or dealer, and most individual buyers have no reason to use it.
Purchase Minimums and Bid Limits
Treasury bonds require a minimum purchase of $100 and must be bought in $100 increments. For noncompetitive bids, the maximum is $10 million per auction. There is no annual cap on how many Treasury bonds you can buy; you can bid in every auction throughout the year as long as each bid stays within the $10 million ceiling.
This is where people frequently confuse Treasury bonds with savings bonds. Series EE and Series I savings bonds have a $10,000 annual purchase limit per series and a $25 minimum. Those limits come from 31 CFR Part 363 and apply only to savings bonds, not to Treasury bonds, notes, or bills. If you’ve seen the “$10,000 per year” figure mentioned alongside Treasury bonds, it’s almost certainly referring to savings bonds.
Selling Before Maturity
Where you buy affects how easily you can sell. If your bond sits in a brokerage account, selling is a normal sell order that settles the next business day at the current market price.
If the bond is in TreasuryDirect, selling takes extra steps. You have to transfer the bond to a bank, broker, or dealer first, then have them sell it on your behalf. There is also a mandatory 45-calendar-day holding period after the issue date before you can transfer a marketable security out of TreasuryDirect, and transfers must be done in $1,000 increments. If there’s any chance you’ll want to sell before the 20- or 30-year term ends, this is worth weighing when you decide where to buy.
How the Interest Is Taxed
Treasury bond interest is subject to federal income tax but exempt from state and local income taxes. That state-tax exemption comes from federal law and applies in every state, which makes Treasury bonds particularly attractive in high-tax states where the after-tax yield can beat comparable corporate bonds.
Each year you’ll receive a Form 1099-INT showing the interest earned. Treasury bond interest appears in Box 3, labeled for U.S. savings bonds and Treasury obligations. Whether the bond is held at TreasuryDirect or a brokerage, you report the interest as income on your federal return for the year it was paid.
Price Risk From Rate Changes
Treasury bonds carry virtually no credit risk, but they carry substantial interest rate risk because of their long maturities. When market rates rise above a bond’s fixed coupon, its market price drops below face value. When rates fall below the coupon, the price rises above face value. That inverse relationship hits 20- and 30-year bonds harder than shorter-term securities because buyers are locked into the older rate for much longer.
If you hold to maturity, price swings along the way don’t affect you: you receive the full face value at the end of the term plus every semiannual interest payment. If you sell early during a period of rising rates, you could receive less than you paid. The 2022–2023 rate-hiking cycle demonstrated this vividly, with some long-term Treasuries losing 30 percent or more of their market value before recovering. That volatility surprises investors who associate Treasury bonds with safety, and it’s the main trade-off for the guaranteed return you get by holding to maturity.