Treasury Bonds: Rates & Terms

Treasury bonds are issued in terms of 20 years and 30 years and are offered in multiples of $100.

Price and Interest

The price and interest rate of a bond are determined at auction. The price may be greater than, less than, or equal to the bond's par amount (or face value). (See rates in recent auctions.)

The price of a fixed rate security depends on its yield to maturity and the interest rate. If the yield to maturity (YTM) is greater than the interest rate, the price will be less than par value; if the YTM is equal to the interest rate, the price will be equal to par; if the YTM is less than the interest rate, the price will be greater than par.

Here are some hypothetical examples of these conditions:

Condition Type of Security Yield at Auction Interest Coupon Rate Price Explanation
Discount (price below par) 30-year bond
Issue Date: 8/15/2005
4.35% 4.25% 98.333317 Below par price required to equate to 4.35% yield
Premium (price above par) 30-year bond reopening
Issue Date: 9/15/2005
3.99% 4.25% 104.511963 Above par price required to equate to 3.99% yield

Sometimes when you buy a bond, you are charged accrued interest, which is the interest the security earned in the current semiannual interest period before you took possession of the security. If you are charged accrued interest, we pay it back to you as part of your next semiannual interest payment.

For example, you buy a 30-Year Treasury bond issued February 15, 2006 and maturing February 15, 2036. If February 15, 2006 fell on a Saturday, Treasury would issue the bond on the next business day, Monday February 17, 2006. Besides the purchase price, you would pay Treasury for the interest accrued from February 15 to February 17, 2006. When you get the first semiannual interest payment, it will include the accrued interest you paid.

If you are a TreasuryDirect customer, you should look at your Current Holdings, Pending Transactions Detail after 5 pm Eastern Time on auction day and check the price per $100 and accrued interest to determine the total price of the security. Next, make sure the source of funds you selected has sufficient funds to cover the total price. If you need to add funds to cover the purchase price, you have to do so before the issue date of the security.

If you buy from a bank or broker, please consult the bank or broker to learn payment arrangements.

Bonds pay interest every six months.

Options at Maturity – and Before

You can hold a bond until it matures or sell it before it matures.

If you don't sell, your options at maturity depend on where you hold your bond:

  • TreasuryDirect. Redeem the bond or use its proceeds to reinvest into another bond.*
  • Legacy Treasury Direct. Redeem the bond. (Bonds cannot be reinvested in Legacy Treasury Direct, which is being phased out.)
  • Bank or Broker. For your options, consult your bank or broker.

Auction Pattern

20-Year Bond and 30-Year Bond

  • Original Issues—February, May, August, November
  • **Reopenings (scheduled)—January, March, April, June, July, September, October, December

*If you choose to reinvest and want to know whether your bond will reinvest into a 20-year bond or a 30-year bond, check your account in the weeks prior to the maturity date of your original bond. Due to unscheduled re-openings, which occur occasionally, a 20-year bond might be set to reinvest into a 30-year bond, or vice versa. If you don't want the scheduled reinvestment, you can cancel it.

** In a reopening, we sell an additional amount of a previously issued security. The reopened security has the same maturity date and interest rate as the original security. However, as compared to the original security, the reopened security has a different issue date and usually a different purchase price.

Paper Bonds or Electronic Bonds

Today we issue Treasury bonds in electronic form.

We used to issue Treasury bonds in paper form. The last paper bonds matured in 2016. For information on paper Treasury bonds, contact us:

  • Send an e-mail
  • Call 844-284-2676 (toll free)
  • Write to:
    Treasury Retail Securities Services
    P.O. Box 9150
    Minneapolis, MN 55480-9150