RESEARCH CENTER

Auction Frequently Asked Questions

What is a Treasury securities auction?

Each U.S. Treasury bill, note, bond, Floating Rate Note (FRN) or Treasury Inflation-Protected Security (TIPS) is sold at a public auction. In these auctions, all successful bidders are awarded securities at the same price, which is the price that corresponds to the highest rate, yield, or discount margin of the competitive bids we accept. A complete explanation of the auction process can be found in our Uniform Offering Circular, which is in the Code of Federal Regulations (CFR) at 31 CFR Part 356.

How do I find out when an auction will take place?

  • Subscribe to get auction announcements electronically through e-mail.
  • View current and past announcements on the TreasuryDirect website.

Where can I find long-range information on auctions?

Usually on the first Wednesday of February, May, August, and November, the U.S. Treasury publishes a tentative auction schedule (PDF). The dates on the schedule can change, but seldom do. In addition to this schedule, we provide a general pattern of when auctions are held; this information is available by type of security and by month.

How can I participate in an auction?

Simply submit a tender with a bid for the security you would like to purchase. You can bid either noncompetitively or competitively, but not both ways in the same auction. In TreasuryDirect, you can only bid noncompetitively.

If you bid noncompetitively, you'll be awarded the full amount of your bid for a security at the rate, yield, or discount margin determined at the auction close. Therefore, you don't have to specify a rate, yield, or discount margin with your bid. Noncompetitive bids are limited to $5 million per auction. Most individual investors bid noncompetitively.

If you bid competitively, you have to specify the return - the discount rate for bills, the yield for notes, bonds, and TIPS, or the discount margin for FRNs - that you wish to receive. Depending on the highest competitive discount rate, yield, or discount margin awarded at auction compared to your bid, you may be awarded the full amount, a portion, or none of the security for which you bid. Competitive awards are limited to 35% of the total offering amount.

What is direct bidding and how long has direct bidding been allowed?

In a Treasury securities auction, direct bidding is the submission of bids by an entity directly to the Treasury or Federal Reserve rather than through an intermediary such as a bank or a securities dealer. Treasury has permitted direct bidding, both competitively and noncompetitively, as long as it has conducted securities auctions.

Who may bid directly?

Entities permitted to submit bids directly include, but are not limited to, primary dealers, other brokers and dealers (non-primary), various types of investment funds (for example, pension, hedge, mutual), insurance companies, depository institutions (banks), foreign and international entities (governmental and private),  the Federal Reserve (System Open Market Account), and individuals. 

Any entity or individual may bid directly as long as the entity or individual has made all the necessary arrangements for access to TAAPS and has made proper arrangements for delivery and payment for auction awards.  For entities or individuals that do not have a funds and securities account with the Federal Reserve, payment is arranged through an autocharge agreement.

What is a direct bidder?

"Direct Bidder" is referred to on the auction results press release as non-primary dealer submitters bidding for their own house accounts, i.e., for the bidder's "proprietary" accounts.

What is an indirect bidder?

An "Indirect Bidder" is referred to on the auction results press release as customers placing competitive bids through a direct submitter, including Foreign and International Monetary Authorities placing bids through the Federal Reserve Bank of New York.

How do I find out the results of an auction?

  • Subscribe to get the results electronically through e-mail.
  • View the results on TreasuryDirect.gov.
  • Some newspapers report auction results.

What is a single-price auction?

U.S. Treasury bills, notes, bonds, FRNs, and TIPS are sold at single-price auctions. In a single-price auction, all successful competitive bidders and all noncompetitive bidders are awarded securities at the price equivalent to the highest rate, yield, or discount margin of awarded competitive tenders.