You can buy directly at TreasuryDirect.gov for free, or through any brokerage. Choose between T-Bills (1 year or less), Treasury Notes (2 to 10 years), or Treasury Bonds (20 to 30 years) based on how long you can lock up your money.
Treasury bonds are not flashy. They will not double overnight. They will not show up in a Reddit post. What they will do is pay you a steady rate, return your money on schedule, and let you sleep at night when the stock market is having a bad year.
For most investors, that is exactly the point. Here is how to buy them.
What A Treasury Bond Is And Why It Is Safe
A bond is just an IOU. When you buy a Treasury bond, you are lending money to the U.S. government. The government promises to pay you interest, usually twice a year, and return your full principal when the bond matures. Treasury bonds are considered the safest investment in the world.
The reason is simple. They are backed by the full faith and credit of the United States government. The government would have to default or collapse for you not to get paid.
That kind of safety is rare in investing. It is the foundation that everything else gets compared to. Stocks work very differently - if you want a side-by-side, our piece on the difference between stocks and bonds covers it. (Worth noting: the U.S. government is the only entity in the country that can legally print money.
Our explainer on whether the Fed prints money walks through why that matters for the safety of Treasuries.)
The Three Types Of Treasury Bonds You Can Buy
When people say "Treasury bonds," they often mean the whole family. There are actually three main flavors. Type
Maturity
Best For
Treasury Bills (T-Bills)
- 1 year or less
- Short-term cash or emergency reserves
Treasury Notes
- 2 to 10 years
- Medium-term goals
Treasury Bonds
- 20 to 30 years
- Long-term income
The longer you lend the government your money, the higher the interest rate you typically receive. That is your reward for tying up your cash longer.
(If a bunch of these terms are still new, our glossary of 77+ stock market terms defines coupon rate, maturity, yield, and more in plain English.)
Where To Buy Treasury Bonds: TreasuryDirect Vs. Brokerage
You have two main options.
Option 1: TreasuryDirect.gov
This is the U.S. government's own website. You can buy Treasury bonds, notes, T-Bills, and TIPS directly. There are no fees. There are no commissions. You set up an account, link your bank, and buy.
Option 2: A Brokerage
You can also buy Treasuries through any major brokerage. The advantage is that everything sits in the same account as your stocks and ETFs.
You can also sell Treasuries before they mature if you go through a brokerage, since the brokerage runs a secondary market. Either way works.
TreasuryDirect is best for buy-and-hold investors who want zero fees. A brokerage is better if you want flexibility and simplicity. Which approach fits depends in part on whether you take a more active or passive investing approach overall.
Key Treasury Bond Terms You Need To Know
Buying a Treasury is simple. Understanding it is what makes you a smarter investor. A few terms to know. Yield to maturity. This is the return you get from owning a bond, expressed as a percentage. It is the interest payment divided by the bond's current price. The key relationship to remember:
- Bond prices go down, yields go up
- Bond prices go up, yields go down
When you read that "the 10-year Treasury yield rose to 4.5%," that means investors are now getting 4.5% for lending money to the government for 10 years. Coupon rate.
This is the fixed interest rate the bond pays each year. It is set when the bond is issued and never changes. A $1,000 bond with a 5% coupon rate pays $50 every year until maturity.
It does not matter what happens to the bond's market price. The $50 is locked in. (That guaranteed income stream is similar to what dividend investors look for - our piece on dividend investing for passive income covers the stock-side equivalent.) Premium vs. discount.
Bond prices can move above or below their face value based on interest rate changes. Say you have a bond with a face value of $1,000.
If new bonds now pay only 4% but yours pays 6%, your bond is worth more. It might trade at $1,150 - a premium. If new bonds pay 8%, your 6% bond is worth less. It might sell for $850 - a discount.
This is why bond prices move when interest rates change.
How To Buy Treasury Bonds That Protect Against Inflation (TIPS)
There is one more type worth knowing about. TIPS, or Treasury Inflation-Protected Securities. TIPS are special Treasury bonds that protect you from inflation.
The principal value adjusts based on the Consumer Price Index. Our piece on how Treasuries and TIPS might protect your portfolio in an AI bubble gets into when this kind of protection matters most. Here is how it works. Say you buy a $10,000 TIPS with a 2% interest rate.
If inflation is 3% over the next year, your principal gets bumped up to $10,300. Now you earn 2% on that higher amount, which is $206 instead of $200. When the bond matures, you get back $10,300, not just your original $10,000.
The big advantage is that TIPS guarantee a real return above inflation. The 2% on a TIPS means 2% above inflation, whatever inflation turns out to be.
The trade-off is that TIPS pay lower stated rates than regular Treasuries. A 10-year Treasury might pay 4.5% while a 10-year TIPS pays 2%. But the regular Treasury's 4.5% gets eaten away by inflation. The TIPS rate is protected. TIPS make the most sense when:
- You are worried about future inflation
- You are investing for the long term
- You want to preserve purchasing power, not just dollars
You can buy TIPS the same way you buy regular Treasuries. They come in 5, 10, and 30-year maturities.
A Smart Treasury Bond Strategy: Bond Laddering
Most beginners buy one Treasury bond and stop there. That is like buying one ingredient and calling yourself a chef. Real bond investors use strategies.
The simplest one is called bond laddering. Imagine you have $50,000 to invest. Instead of putting it all in one 10-year bond, you build a ladder.
- $10,000 in a 1-year Treasury
- $10,000 in a 2-year Treasury
- $10,000 in a 3-year Treasury
- $10,000 in a 4-year Treasury
- $10,000 in a 5-year Treasury
Every year, one rung matures. You take that $10,000 and buy a new 5-year bond at the top of the ladder. Two things happen.
First, you are never more than a year from accessing some of your money without penalty. Second, you are constantly capturing whatever interest rates are doing. If rates go up, great.
You are reinvesting at higher rates every year. If rates go down, no problem. You already locked in good rates with your longer bonds.
Our full bond ladder strategy guide goes deeper on how to build and maintain one. You can also mix in TIPS.
Replace a couple of rungs with TIPS to add inflation protection. If you want to combine Treasuries with another safe option, CDs (certificates of deposit) work in a similar way and can fit into the same ladder approach.
So can a high-yield savings account for the most accessible part of your cash. Some investors also pair Treasuries with annuities to lock in even longer income streams - though the trade-offs there get more complex.
When To Buy Treasury Bonds (And When Not To)
Treasuries are not always the right call. They make the most sense when: You need stability. When the stock market is having a terrible year, Treasuries keep paying you interest.
They do not care what the S&P 500 is doing. (For why staying calm during downturns is the hardest part of investing, our piece on the psychology of market crashes covers it.) Even in a bear market, your Treasury keeps paying. That is the whole point. Interest rates are attractive.
When you can get 4% to 5% from a safe Treasury, that is compelling. From 2010 to 2021, rates were near zero and Treasuries were not very interesting for income. (Our piece on income investing breaks down all the ways to get paid by owning assets - bonds are one of several.)
You are getting closer to retirement. A common rough rule is keeping your bond percentage close to your age. A 30-year-old might hold 30% in fixed income. A 60-year-old might hold 60%. Treasuries are also the asset most investors run to during a recession.
When stocks are falling and headlines are scary, that "boring" Treasury bond becomes the part of the portfolio you are most grateful for.
How To Buy Treasury Bonds: The Bottom Line
How to buy treasury bonds is simple. Pick TreasuryDirect.gov or a brokerage. Pick your maturity based on when you need the money.
Decide whether to use TIPS for inflation protection. Treasuries will not make you rich. That is not their job. Their job is to be the foundation of your portfolio - the part that does not move much when everything else is shaking.
Used right, they help you stay calm and stick to the plan when other investors panic. That is worth more than most people realize.
