Every security sold through TreasuryDirect exists only in digital form — no paper, no certificates. They’re all U.S. Treasury products, and they share one tax quirk worth knowing upfront: federal taxes apply to any interest you earn, but state and local taxes don’t.
Securities fall into two buckets: Savings Bonds and Treasury Marketable Securities.
Savings bonds can’t be sold or traded. You hold them in your TreasuryDirect account and cash them out directly with the Treasury when you’re ready.
Series EE Bonds
EE Bonds don’t pay interest along the way — everything accumulates and gets paid out when you redeem. How often interest compounds depends on the issue date, and bonds issued May 1, 2005 or later lock in a fixed rate for their full lifespan. The maximum earning window is 30 years, and you can purchase up to $10,000 per calendar year.
Series I Bonds
I Bonds work the same way as EE Bonds in terms of payout — interest builds, you collect at redemption. The difference is in the rate structure. I Bonds combine a fixed rate (set for the life of the bond) with a variable rate that resets every six months based on inflation data. For anyone worried about inflation eating into their returns, this structure offers some real protection. Same 30-year window, same $10,000 annual cap.
These can be bought and sold on secondary markets, which sets them apart from savings bonds. They go through an auction process and vary quite a bit depending on how long you’re willing to hold them and how you want to receive your returns.
Treasury Bills
Bills are the shortest-term option, maturing in one year or less. There’s no periodic interest payment — instead, you buy the bill at a discount and receive the full face value at maturity. The gap between those two numbers is your return. Buy a 26-week bill for $9,750, get $10,000 back at maturity, pocket $250. Bills are available in $100 increments, and noncompetitive purchases top out at $10 million.
Treasury Notes
Notes sit in the medium-term range, with maturities between 2 and 10 years. They pay a fixed rate — determined at auction — to your account every six months, and you get your principal back when they mature. Same $100 minimum, same $10 million noncompetitive ceiling as bills.
Treasury Bonds
Structurally, bonds look a lot like notes: fixed rate set at auction, semiannual interest payments, principal returned at maturity. The main distinction is time — bonds run longer than 10 years. The $100 minimum and $10 million noncompetitive cap still apply.
Treasury Inflation-Protected Securities (TIPS)
TIPS come with maturities between 5 and 30 years and carry a fixed interest rate, but the principal itself moves with inflation as tracked by the CPI-U. Rising inflation pushes the principal up; deflation pulls it down. That said, if deflation leaves your adjusted principal below what you originally paid, the Treasury makes you whole — you’ll always get back at least your original investment. Interest is calculated by applying the fixed rate to the adjusted (not original) principal, so your actual payment amounts will shift over time. Minimum is $100, noncompetitive limit is $10 million.
Floating Rate Notes (FRNs)
FRNs have a 2-year term and suit investors who’d rather their returns track current rates than lock into a fixed number. The interest rate resets weekly, tied to the most recent 13-week Treasury bill auction rate plus a spread determined when you bought in. Payments go out quarterly. When rates climb, you earn more; when they drop, you earn less. Available from $100, with the same $10 million noncompetitive maximum.