How to Buy Treasury Bonds — A Complete Guide for Individual Investors
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Key Takeaways
Treasury securities can be purchased through TreasuryDirect.gov with no fees and a $100 minimum, or through most major brokerages.
The current yield curve offers 3.42% on 2-year notes, 4.02% on 10-year notes, and 4.67% on 30-year bonds as of late February 2026.
Treasury interest is exempt from state and local taxes, boosting after-tax returns for investors in high-tax states.
With the Fed funds rate declining from 4.33% to 3.64% over six months, locking in longer-dated yields may be advantageous before further rate cuts.
Treasury ETFs offer convenience and liquidity, while individual bonds guarantee principal at maturity — choose based on your investment horizon and goals.
US Treasury bonds are among the safest investments in the world, backed by the full faith and credit of the United States government. Yet many individual investors are unsure how to actually purchase them. With the 10-year Treasury yield at 4.02% and the 30-year bond paying 4.67% as of late February 2026, government bonds offer meaningful income without the volatility of stocks.
The good news is that buying Treasuries has never been easier. Whether you prefer the direct route through the US Treasury's own platform or the convenience of a brokerage account, there are multiple paths to adding government bonds to your portfolio. This guide walks through every option — from TreasuryDirect to bond ETFs — so you can choose the approach that fits your investment style and goals.
Understanding the Types of Treasury Securities
Average Treasury Interest Rates (Jan 2026)
Buying Through TreasuryDirect
Buying Through a Brokerage Account
Treasury Yield Curve (Feb 2026)
Treasury ETFs and Mutual Funds
Tax Considerations and the Current Rate Environment
Treasury interest income is exempt from state and local income taxes, which can be a meaningful advantage for investors in high-tax states like California and New York. Federal income tax still applies, but the state tax exemption effectively boosts after-tax returns compared to corporate bonds or CDs offering similar nominal yields.
The current rate environment is favorable for Treasury buyers. The Federal Reserve has been steadily cutting rates — the federal funds rate has declined from 4.33% in August 2025 to 3.64% in January 2026, a six-month streak of easing. The 10-year yield has followed, dropping from 4.18% in mid-February to 4.02% by month's end. The 10-year-to-2-year spread sits at a healthy +0.59%, confirming the yield curve's return to a normal upward slope after its historic 2022-2024 inversion.
For new Treasury buyers, this creates an interesting dynamic. Falling short-term rates mean T-Bill yields will likely decline further, making longer-dated notes and bonds relatively more attractive for locking in income. A 10-year note purchased today at 4.02% locks in that rate regardless of where the Fed takes short-term rates over the next decade.
Federal Funds Rate Decline
Conclusion
Buying Treasury bonds is straightforward once you understand your options. TreasuryDirect offers commission-free access to new-issue auctions with $100 minimums, while brokerage accounts add secondary market trading and easier portfolio management. ETFs provide the simplest path for investors who want broad Treasury exposure without selecting individual bonds.
With yields across the curve between 3.42% and 4.67% and the Fed still in easing mode, Treasuries offer attractive risk-free income in the current environment. The key decision isn't whether to buy, but where on the yield curve to position — shorter maturities for flexibility or longer maturities to lock in today's rates before the Fed cuts further.
Disclaimer: This content is AI-generated for informational purposes only and does not constitute financial advice. Consult qualified professionals before making investment decisions.
Before buying, it helps to understand what you're choosing between. The US Treasury issues several types of securities, each with different maturities, interest payment structures, and use cases.
Treasury Bills (T-Bills) mature in 4 to 52 weeks and are sold at a discount to face value. You don't receive periodic interest — instead, you earn the difference between the purchase price and the $1,000 face value at maturity. As of January 2026, T-Bills carry an average interest rate of 3.760%, making them attractive for short-term cash management.
Treasury Notes (T-Notes) have maturities of 2, 3, 5, 7, or 10 years and pay interest every six months. The 10-year note currently yields 4.02%, while the 2-year note pays 3.42%. Notes are the most popular Treasury security for individual investors seeking regular income.
Treasury Bonds (T-Bonds) are the longest-dated securities, maturing in 20 or 30 years. The 30-year bond yields 4.67%, offering higher income in exchange for greater interest rate risk. T-Bonds average 3.369% across outstanding issues.
TIPS (Treasury Inflation-Protected Securities) adjust their principal value with the Consumer Price Index. With CPI at 326.588 in January 2026 — up from 319.679 a year earlier — TIPS provide a real yield (currently averaging 0.983%) plus inflation compensation.
Floating Rate Notes (FRNs) pay interest that adjusts with short-term rates, averaging 3.744% currently. They offer protection against rising rates but less upside if rates fall.
The most direct way to buy Treasury securities is through TreasuryDirect.gov, the US Treasury's online platform for individual investors. There are no fees, no commissions, and no middlemen.
To get started, you'll need a Social Security number, a US address, a checking or savings account for funding, and an email address. The registration process takes about 10 minutes. Once your account is set up, you can purchase securities in two ways:
Auction purchases let you buy new-issue Treasuries at the same prices large institutions pay. The Treasury holds regular auctions — weekly for T-Bills, monthly for most notes, and quarterly for bonds. You can submit either a noncompetitive bid (you accept whatever yield the auction determines) or a competitive bid (you specify the yield you want). Noncompetitive bids are virtually always filled, making them the best choice for most individual investors.
Minimum purchases are just $100 for all security types, with $100 increments above that. This low threshold makes Treasuries accessible to nearly any investor.
The main drawback of TreasuryDirect is liquidity. Securities held here cannot be easily sold before maturity — you'd need to transfer them to a brokerage account first, which can take several weeks. For investors who might need to sell before maturity, buying through a broker is often more practical.
Most major brokerages — including Fidelity, Charles Schwab, and Vanguard — let you buy Treasury securities directly in your existing investment account. This approach offers several advantages over TreasuryDirect.
New-issue auctions are available at most brokerages with no commission. You can participate in Treasury auctions just as you would through TreasuryDirect, often with a more user-friendly interface. Fidelity and Schwab both offer dedicated fixed-income platforms that show upcoming auctions, current yields, and order entry in one place.
Secondary market purchases are where brokerage accounts really shine. You can buy or sell existing Treasuries at market prices any time the bond market is open. This is critical if you need liquidity or want to target a specific maturity date that doesn't match the auction calendar. Bid-ask spreads on Treasuries are typically tight — just a few cents per $100 of face value — keeping transaction costs low.
Bond ladders are easy to build through a brokerage. A ladder involves buying Treasuries with staggered maturities — say 1, 2, 3, 4, and 5 years — so a portion matures each year. This strategy balances yield (longer maturities pay more) with flexibility (regular maturities provide liquidity). With the 2-year at 3.42% and the 10-year at 4.02%, the current yield curve rewards extending maturity.
For investors who want Treasury exposure without picking individual bonds, exchange-traded funds and mutual funds offer a convenient alternative.
Short-term Treasury ETFs like the iShares 1-3 Year Treasury Bond ETF (SHY) hold T-Bills and short-dated notes. These funds have minimal interest rate risk and currently yield in the 3.4-3.8% range, closely tracking the front end of the yield curve.
Intermediate-term Treasury ETFs like the iShares 7-10 Year Treasury Bond ETF (IEF) track the middle of the curve. With the 10-year at 4.02%, these funds offer higher yield but greater price sensitivity to rate changes.
Long-term Treasury ETFs like the iShares 20+ Year Treasury Bond ETF (TLT) hold long-dated bonds. With the 30-year at 4.67%, these funds offer the highest income but the most volatility — a 1% rise in long-term rates can cause roughly a 17% price decline in TLT.
TIPS ETFs like the iShares TIPS Bond ETF (TIP) provide inflation-adjusted Treasury exposure. With CPI running at approximately 2.2% year-over-year and TIPS offering a 0.983% real yield, total return potential is around 3.2% plus inflation adjustments.
The tradeoffs are straightforward: ETFs charge expense ratios (typically 0.03-0.15% for Treasury funds), but they offer instant diversification, daily liquidity, and no minimum holding period. Individual bonds have no ongoing fees and guarantee your principal at maturity — ETFs do not.