What Is TreasuryDirect? How to Open an Account and Buy U.S. Treasuries

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TreasuryDirect is the U.S. Department of the Treasury’s online platform for buying Treasury securities straight from the federal government, with no broker, bank or dealer in between. Through a TreasuryDirect account you can buy marketable Treasuries and electronic savings bonds at original issue. You pay no commissions, hold the securities in electronic form, and receive interest and principal back to your linked bank account.

What You Can Buy on TreasuryDirect

All are backed by the full faith and credit of the U.S. government. Marketable Treasuries start at $100 and are sold in $100 increments; electronic savings bonds start at $25. They fall into two groups.

Marketable securities can be traded in the secondary market once issued:

• Treasury bills: short-term discount securities with terms such as 4, 8, 13, 17, 26 and 52 weeks. You buy below face value and receive face value at maturity.
• Treasury notes: 2- to 10-year terms, paying interest every six months.
• Treasury bonds: 20- and 30-year terms, also paying semiannual interest.
• TIPS: principal adjusts with the Consumer Price Index, and interest is paid on the adjusted principal.

Savings bonds are non-marketable. They are registered to you and can only be cashed with the Treasury:

• Series I bonds: a fixed rate plus an inflation rate that resets every six months.
• Series EE bonds: a fixed rate, with the Treasury guaranteeing the bond doubles in value if held 20 years.

Electronic savings bond purchases are capped at $10,000 per series per calendar year for each Social Security number.

How TreasuryDirect Works

Marketable Treasuries are sold at auction, and the auction sets each security’s rate or yield. Bidders are either competitive or non-competitive. Competitive bidders name the yield or discount margin they will accept. Non-competitive bidders agree to take whatever the auction produces. TreasuryDirect accepts only non-competitive bids, up to $10 million per auction.

When an auction closes, the Treasury fills all non-competitive bids first, then accepts competitive bids from the lowest yield upward until the offering amount is sold. Every accepted bidder gets the same terms, the highest accepted yield, so as a TreasuryDirect buyer you are guaranteed the security but cannot choose your yield.

Money moves only between your account and your linked bank account. At maturity, proceeds return to that bank account unless you scheduled a reinvestment into a new issue of the same security. You can also have the IRS or your state tax department deposit a tax refund into your TreasuryDirect account and use it to buy securities.

How to Open a TreasuryDirect Account

1. On treasurydirect.gov, choose the option to open a new account.
2. Select the account type: individuals, trusts, estates, corporations, partnerships, LLCs and sole proprietors can all hold accounts.
3. Enter your Social Security number (or EIN for an entity), U.S. address and email address.
4. Link a U.S. checking or savings account by its routing and account numbers.
5. Set a password and complete identity verification.
6. Once the account is active, choose a security, an amount and an issue date, and confirm. Your bank account is debited on the issue date.

Financial professionals cannot use TreasuryDirect to buy securities for clients, so the account is always managed by its owner.

Example of a TreasuryDirect Purchase

Hypothetical example, for mechanics only. You place a non-competitive bid for $1,000 face value of a 26-week bill. The auction prices the bill at $980 per $1,000 face. On the issue date, $980 is debited from your bank account. Twenty-six weeks later, $1,000 is deposited back.

• Interest earned = face value − purchase price = $1,000 − $980 = $20
• Return on cost = $20 ÷ $980 ≈ 2.04% for the half year

Bills pay no coupons, so the discount is the entire return. For notes and bonds, which pay semiannual interest and may be bought above or below face value, yield to maturity better measures what you earn if you hold to maturity.

Limitations of TreasuryDirect

New issues only. TreasuryDirect sells only on-the-run securities, the most recently auctioned issue for each maturity. When a new one is auctioned (the 52-week bill, for example, is auctioned every four weeks), the previous issues become off-the-run and trade only in the secondary market, which TreasuryDirect does not access.

No selling before maturity. To sell a bill, note, bond or TIPS early, you must transfer it to a bank or broker and sell there. A security must be held in TreasuryDirect for at least 45 days before it can be transferred. Selling before maturity means accepting the market price, which may be above or below what you paid.

Savings bond holding rules. I and EE bonds cannot be cashed for the first 12 months. If you cash them before five years, you lose the last three months of interest.

Basic tools. The platform executes purchases and reinvestments but offers no trading, price quotes or bond funds. Investors who want instant liquidity or a diversified bond portfolio often use a brokerage or a Treasury ETF instead.

TreasuryDirect vs. a Brokerage Account

Both can buy new Treasuries at auction, often commission-free depending on the broker. The difference is what happens afterward: TreasuryDirect holds securities in your name on the Treasury’s own books until maturity, while a brokerage account can also buy off-the-run Treasuries in the secondary market and sell at any time before maturity. Savings bonds are the exception: electronic I and EE bonds are available only through TreasuryDirect.

FAQs

The Bottom Line

TreasuryDirect suits investors who plan to buy new Treasuries at auction and hold them to maturity, and it is the only place to buy electronic I and EE bonds. Investors who want to buy older issues, sell at any time, see price quotes or own a diversified bond portfolio are better served by a brokerage account or a Treasury ETF.