Marketables Securities glossary for TreasuryDirect Account holders
- The 1099-INT is an IRS form that lists the amount of interest a taxpayer earned on a specific investment or investments during the year. You need 1099-INTs for all of your investments that paid you taxable money to calculate your taxes.
If you have a TreasuryDirect account, you must get your 1099-INT yourself from your account. If we have taxable money to report to the IRS for you, your 1099-INT will be ready during January.
If you still have securities in Legacy Treasury Direct, we mail your 1099-INT to you.
- Accrued interest
This usually happens only in 2 situations:
- You buy in a reopening.
- The security’s dated date falls on a weekend or holiday.
In those cases, the interest that the security earned during the gap becomes part of your purchase price for the security. The interest has added up (accrued) before you own the security.
However, you get back the money you paid for the accrued interest. We pay you that with your first full six-month interest payment.
- Administered estate
When someone dies, what they owned must be distributed according to their will or the law. That is called “settling the person’s estate.”
In some cases, a law court is involved and a judge appoints the person who is responsible for settling the estate. That person is the administrator for the estate and the estate is considered to be “administered.”
You can give someone else the right to act for you. Someone else can give you the right to act for them. The written and signed statement giving those rights is called a “power of attorney.” The person giving someone else the right to act for them is the grantor. The person who has the right to act on behalf of someone else is an “attorney-in-fact.”
An auction is a process where you buy by bidding on a product.
If you bid through your TreasuryDirect account, you bid non-competitively. You agree to accept the terms that are set by the competitive bids.
- Auction announcement
On the announcement date, we send out a press release and we post the announcement on this website. The announcement tells you what security we are auctioning, when the auction will take place, how much money is available for that auction, and other information.
For more details and examples: How auctions work
- Auction schedule
We post a list of upcoming auctions. We also have various versions of our typical auction schedules for the different Treasury marketable securities. You can get to all this from our web page: When auctions happen (schedules).
- Automated clearing house (ACH)
A secure system for transferring money electronically. When we deposit money directly into your bank account, it goes through ACH. When you send money electronically to us or to a bank, broker, or dealer, it goes through ACH.
When we use the word “bank,” we are including banks, credit unions, savings and loans, trust companies, and other financial institutions where you can put money in (deposit money) and take money out.
- Bank account type
Most banks offer you 2 types of bank account: checking or savings. You can send us money from either type. You can ask us to send your money (deposit it) to either type.
- Banker, broker, or dealer
Someone authorized to work with you to bid for, hold, or sell Treasury marketable securities in the Commercial Book-Entry System.
You may bid non-competitively through TreasuryDirect. You may hold (keep) your Treasury marketable securities in your TreasuryDirect account.
However, if you want to bid competitively in a Treasury auction, you must work with a banker, broker, or dealer. If you want to sell your Treasury marketable securities, you must work with a banker, broker, or dealer. You may also have the banker, broker, or dealer hold (keep) your Treasury marketable securities.
- See Treasury bill
- See Treasury bond
We sometimes buy back Treasury marketable securities before they mature (finish their life).
Only dealers who have been named as primary dealers by the Federal Reserve Bank of New York may respond to a buyback announcement.
- Cash management bill
Cash management bills are a type of Treasury bill that we auction when needed (not on a regular schedule). Their time to maturity (to finish their interest-earning life) varies from a few days to hundreds of days.
You can buy a cash management bill only through a banker, broker, or dealer<link each term to that term in the glossary>. You cannot buy them from your TreasuryDirect account.
You can move some cash management bills (those that have terms of 26 weeks or 52 weeks) into your TreasuryDirect account after you buy them.
- Certificate of Indebtedness (C of I)
- See Zero-Percent Certificate of Indebtedness
- See Signature certification
- Certified copy
When we ask for a certified copy, we need a copy of the original legal document that has a raised or impressed seal and also has statements about the accuracy and authenticity of the document.
- Certifying officer
An officer or other employee of a financial institution, such as a bank, trust company, or credit union, who is expressly authorized by the institution to certify or guarantee signatures.
- Closed book period
“Closed book period” applies to Treasury marketable securities that you have in your TreasuryDirect account (or your Legacy Treasury Direct). For a certain number of days before we are due to pay you for that Treasury marketable security, you cannot act on that security. That includes not transferring it, not selling it, not arranging to reinvest it.
In TreasuryDirect, the closed book period is 4 business days.
In Legacy Treasury Direct, the closed book period is 10 business days.
- Commercial book-entry system (CBES)
To buy and hold Treasury marketables securities, you have 2 options: You can do this through
- an account in our online program, TreasuryDirect, or
- with a banker, broker, or dealer
(You may also have securities in our older program, Legacy Treasury Direct, which we are phasing out.)
A banker, broker, or dealer works in a financial system called the commercial book-entry system.
For a diagram and explanation of how the CBES works, see The commercial book-entry system -- in depth.
- Competitive bidding
When we auction Treasury marketable securities, you have 2 options for participating: competitively or non-competitively.
To bid competitively, you specify some of the financial aspects you are willing to accept for what we are offering in the auction: the discount rate or yield, which determine the price and what you will earn over time for that security.
To bid competitively, you work in the commercial book-entry system.
To bid from your TreasuryDirect account, you must bid non-competitively. That means you only specify how much money you want to spend for those securities. You accept the rate that we determine in the auction from the way we treat the competitive bids.
- Consumer price index (CPI)
The U.S. Bureau of Labor Statistics collects data on how the cost to urban (city) consumers for goods and services changes over time. They publish the data as the CPI-U (consumer price index for all urban consumers).
We use the CPI-U to adjust what you earn on one of our Treasury marketable securities: Treasury Inflation-Protected Security (TIPS). We also use it to calculate the next 6-month combined interest rate for Series I savings bonds.
- Court-appointed representative
When someone dies, what they own must be distributed according to their will or the law. That is called “settling the person’s estate.”
In some cases, state law or the amount the deceased person owned means that a court appoints the person to be in charge of settling the estate. That is a “court-appointed representative.” And we say that the estate is being “administered.”
Every Treasury marketable security has a CUSIP number. The CUSIP identifies the type of security and its maturity date.
The CUSIP is a combination of 9 letters and numbers. Example: 123456X78.
You can use the CUSIP number of a security to get information about it.
CUSIP stands for Committee for Uniform Security Identification Procedures.
If you own stocks or bonds from other sources besides Treasury, those stocks and bonds also have CUSIP numbers.
- Dated date
The date when a Treasury note, Treasury bond, or Treasury Inflation-Protected Security (TIPS) begins earning interest. The dated date and issue date are usually the same. The dates are different when a security is sold in a reopening or when the dated date falls on a weekend or holiday. In both of those cases, the dated date comes before the issue date.
Deflation is the opposite of inflation. When the cost of goods and services goes up so that the same amount of money buys less, we have inflation. When the cost goes down, we have deflation.
We adjust the principal of the Treasury marketable security Treasury Inflation-Protected Securities (TIPS) for inflation and deflation.
- Direct deposit
When the money someone owes you goes into your bank account without going to you first as cash or a check, that money is being “deposited directly” into your account. TreasuryDirect makes payment to you by direct deposit. You give us the information we need when you open your account.
If you want to change where we directly deposit money for you, you can add or change your bank information.
- Discount rate
This applies to Treasury bills.
When you keep a Treasury bill until it matures (which can be 4, 8, 13, 26, or 52 weeks), you get the face value of the bill. But you may have paid less than that when you bought it. If so, you bought it at a discount.
The money you make for buying the bill is the difference between what you paid for it and what you get when it matures. That is the discount rate. We specify it as an annual percentage based on a 360-day year.
- Electronic Funds Transfer (EFT)
EFT is the process of moving money electronically. When we deposit money directly into your bank account, that is an example of EFT. When you put money into your TreasuryDirect account directly from your bank, that is an example of EFT. When you give or get money electronically in the commercial book-entry system, you are using EFT.
- Employer Identification Number (EIN)
Individuals have a Social Security Number (SSN). Businesses and other “entities” such as a trust or the estate of someone who has died have an Employer Identification Number (EIN). Both are types of a Taxpayer Identification Number (TIN). The Internal Revenue Service (IRS) assigns EINs.
- Entity account
An entity account in TreasuryDirect is opened and managed by a person on behalf of an “entity” such as a business (including a sole proprietorship), trust, or the estate of someone who died. The rules for what you can and cannot do in an entity account differ somewhat from the rules for a personal account.
For information on the types of “entities” that can and cannot have an entity account in TreasuryDirect: Learn more about entity accounts
When someone dies, what that person owns must be distributed according to the person’s will or the law. What the person owns is that person’s “estate.”
The executor of an estate is the person who is in charge of carrying out the directions and requests in the will of someone who died. Usually, the person who died named the executor in their will.
- External transfer
External means “outside of.”
If you move all or part of a Treasury marketable security from your TreasuryDirect account to a banker, broker, or dealer, you are sending it out of TreasuryDirect and into the commercial book-entry system. You are making an external transfer.
If you want to do an external transfer of part of a Treasury marketable security, you must transfer at least $100 and leave at least $100 of the value of that security.
To sell a Treasury marketable security, you must transfer it to the commercial book-entry system.
With an external transfer, the bank or broker becomes the owner of the security.
- Face amount, face value
- Also par amount
- Financial institution
- See bank
- Floating Rate Note (FRN)
FRNs are one of our 5 types of Treasury marketable securities.
FRNs mature in 2 years from their issue date. They pay interest 4 times a year.
They are called “floating rate” notes because the rate of interest varies. We base the interest each time on the discount rate of 13-week Treasury bills.
- Grantee, Grantor
In TreasuryDirect, you may give someone else the right to see (View) or act on (Transact) one or more of your securities. When you do that, you are granting them those rights. You are the “grantor.” The person you let View or Transact for that savings bond is the “grantee.”
You can also be the “grantor” in other situations. For example, you can give (grant) someone the right to act for you in other specific ways by signing a “power of attorney.” The person who gets the right to act for you through a signed power of attorney statement is called an “attorney-in-fact.”
The person who can legally act on behalf of someone who cannot take care of their own affairs.
The person who inherits or is entitled to inherit property (such as Treasury securities) after someone dies. Either the written will of the person who died or the law says who is the heir for someone’s securities.
- Holding period
When you buy a Treasury marketable security in your TreasuryDirect account, you must keep it there for 45 business days before you can move it either to another TreasuryDirect account or outside of TreasuryDirect to a banker, broker, or dealer.
- Incoming external transfer
If you have Treasury marketable securities with a banker, broker, or dealer (in the commercial book-entry system ) or in a Legacy Treasury Direct, you can bring them into your TreasuryDirect account. That is an incoming external transfer – a transfer in to you from an outside source.
When the cost of goods and services goes up over a period of time, your money buys less. That is inflation. Treasury Inflation-Protected Securities (TIPS) protect you from inflation.
Money you get for lending someone money. When you buy a Treasury marketable security, you are lending money to the U.S. Treasury. The amount of interest you get depends on the type of security and the result of the auction of that particular Treasury marketable security.
All Treasury marketable securities, except Treasury bills, pay interest. With a Treasury bill, what you get when the bill matures is the difference between the discounted rate you bought it at and its face value.
- Interest rate
The interest rate determines how much money your money earns. We specify interest rates as percentages.
For example, if you have a $100 Treasury note with an interest rate of 5 percent a year, at the end of one year you get $5.00 in interest (5 percent of $100).
- Internal transfer
You may transfer Treasury marketable securities (as well as savings bonds) from one TreasuryDirect account to another. We call that an “internal transfer” because it is all happening within our online program.
When you transfer a security to someone else, that person becomes the new owner of the security. If you transfer more than one Treasury marketable security at a time, you must transfer the full value of all of them. If you transfer only one Treasury marketable security, you may transfer part or all of the value of the security. If you transfer only part of the value, you must transfer at least $100 and leave at least $100 of the value.
- Investing maturing proceeds
- See Reinvest, reinvesting
- Large position reporting
If you own a particular Treasury security equaling or exceeding a threshold amount that we specify, you have a “large position” for that security and must report to us on a form you get from our website.
When we need a large position report, we post the announcement on our website. The announcement tells you the specific security we are concerned about, the threshold amount, and the deadline for the report.
For the authority we have to do this, announcements, the form to use, and more information, see Large position reporting (LPR).
- Legacy Treasury Direct
Legacy Treasury Direct is our old online program for holding your Treasury marketable securities with the government, rather than with a banker, broker, or dealer.
We are phasing out Legacy Treasury Direct. When you set up an account now, you do it in our newer program, TreasuryDirect.
If you already have an account in Legacy Treasury Direct, you can still keep your securities there – or you can move them to TreasuryDirect.
See more on our information page about Legacy Treasury Direct.
- Legal representative
Legal representative is a general term for someone whom a court appointed to act on behalf of either
- someone has been declared unable to handle their own affairs, or
- the estate of someone who has died
For more about legal representatives related to the death of someone who owns Treasury securities, see Court-appointed representatives.
In your TreasuryDirect account, you can set up custom linked accounts. for whatever special purpose you have for your Treasury securities, such as Saving for the Big Vacation.
- Treasury marketable security
We sell both savings bonds and Treasury marketable securities.
They differ in 2 important ways:
- how you buy them (with or without an auction)
- whether you can sell them after you buy them
- No auction
- Cannot sell them
You can buy and own a new savings bond for yourself. You can buy one for someone else as a gift. You can inherit a savings bond from someone who dies. In some situations, you can transfer a savings bond to someone else. But you cannot sell it.
- Sold through auctions.
- Can sell them
Once you own a Treasury marketable security, you can put it back in the market and sell it through a banker, broker, or dealer.
- Mature, maturity, maturity date
A Treasury security matures (reaches maturity, reaches its maturity date) when its term expires. That term differs for the different Treasury marketable securities:
- T-Bills: 4, 8, 13, 17, 26, or 52 weeks
- T-Bonds: 20 or 30 years
- T-Notes: 2, 3, 5, 7 or 10 years
- FRNs: 2 years
- TIPS: 5, 10, or 30 years
When you buy a Treasury marketable security, you know both its issue date and its maturity date.
On its maturity date, it stops earning interest or increasing in value.
If your Treasury security is in your TreasuryDirect account, we automatically cash it for you when it matures.
You can continue to automatically have Treasury marketable securities of the same type by setting up a reinvestment.
- Non-administered estate
When someone dies, that person's estate (what the person owns) must be "settled" – distributed according to the person's will or the law. If settling the estate does not involve supervision by a court of law and no court appoints a legal representative to administer the estate, that is a non-administered estate.
- Non-competitive bid, non-competitive bidding
When you want to buy Treasury marketable securities through your TreasuryDirect account, you must bid non-competitively. (You may also choose to bid non-competitively with a banker, broker, or dealer.)
When you bid non-competitively, you are limited to a maximum of $10 million for that security type and term.
- See Treasury note
- Original issue date
This applies to all marketables except T-Bills.
We sometimes hold a second auction for the same security (same type, term, CUSIP number, maturity date). We call that second auction a reopening.
With a reopening, we tell you when the securities from the first auction were issued. That is the “original issue date.”
- Power of attorney
“Power of attorney” is the name for a written and signed statement in which someone gives someone else the right to act on their behalf. The person giving the right is called the “grantor.” The person getting the right is called the “attorney-in-fact.”
The par amount of a Treasury marketable security may be different from the price you pay at the auction for that security.
If the price is more than the par amount, you are paying a premium for the security.
If the price is less than the par amount, you are buying the security at a discount.
- Primary account
Your main account in TreasuryDirect.
- Principal, principal amount, principal value
- See Par amount
- See Interest rate
- Redeem, redeeming
“Redeem” means “to turn in the security,” “to cash the security.”
For Treasury marketable securities, “redeem” means getting the money we owe you when the security matures (finishes its term). For example, for a T-Note, that could be after 2, 3, 5, 7, or 10 years, depending on the T-Note you bought.
When you redeem a Treasury marketable security that is in your TreasuryDirect account, you can have us
- Reinvesting, reinvesting maturing proceeds
You can set up reinvestments in your TreasuryDirect account.
Reinvesting means that you use the money from a maturing Treasury marketable security to buy another Treasury marketable security of the same type.
For example, if you buy a 52-week T-Bill, you get the money for it at the end of a year. If you have set up reinvesting for that T-Bill, we automatically buy you a new T-Bill when the earlier one matures.
We sometimes auction a security a second time by offering an addition amount for people to bid on. We are “reopening” the bidding for that security.
In a reopening, much about the security is the same as at the original auction: the type of security, the maturity date, the interest rate, and the CUSIP number. But the price and yield may be different.
If you buy in a reopening, you are likely to owe accrued interest on the security. (You pay for the accrued interest when you pay for your successful bid in the reopening. Then, you get the accrued interest money back with the first interest payment.)
- Request date
In TreasuryDirect, the request date is the date you set for us to take a specific action (a transaction) for you. If we cannot carry out the transaction on your request date because that is a weekend, holiday, or not a transaction processing time, we do it on the next business day or the next transaction processing time.
- Savings bonds
In addition to Treasury marketable securities, we sell savings bonds.
You buy savings bonds directly (no auction). You buy each savings bond for a specific amount and then earn interest on that amount.
We currently sell 2 types of savings bonds:
- Series EE bonds, which pay a fixed rate of interest that you know when you buy the bond and which are guaranteed to double in value in 20 years.
- Series I bonds, which pay an interest rate that can change every 6 months due to inflation.
- Secondary market
You may sell your Treasury marketable securities after you buy them. You may buy previously issued Treasury marketable securities that others want to sell. Because this is “after they are issued” buying and selling, it is called a “secondary market.”
To make something secure is to keep it from danger or risk.
When speaking of finances, a security is a document that promises to repay a loan.
When you buy a security from the U.S. Treasury, you loan money to the government. The government in turn gives you a document as security (as a promise) that they will repay the money you lent and, usually, that they will pay you extra money (interest) for letting them use your money.
At the U.S. Treasury, we offer 2 main types of securities:
- Signature certification
In some situations where you are asking for money from us or asking us to do something relating to your Treasury securities, we need to be sure that you (and not someone else) are signing the form. We require you to have your signature “certified.” That means you sign the form in front of an official of a bank or other financial institution, or in some cases in front of a notary, showing that person proof of your identity.
The 9-digit number that identifies you as an individual for your tax return and other official documents. You get your SSN from the Social Security Administration.
You may see these abbreviations:
- EIN for Employer Identification Number (also sometimes FEIN with F for Federal)
- SSN for Social Security Number
- TIN for Taxpayer Identification Number
TIN is a general term where we mean either an EIN or an SSN, whichever is appropriate for the type of account you have or transaction you want to do.
An EIN identifies a business and some other types of entities. (See entity accounts.)
As an individual, you have an SSN for your tax returns and other documents.
Your Social Security Number is the key identifier for your account in our online program, TreasuryDirect, where you keep your electronic savings bonds and other Treasury securities. (Many people may have the same name, but each has a unique Social Security Number.)
The principal and each of the remaining interest payments become separate securities.
Because the principal is no longer connected to the interest payments (which are sometimes called “coupons”), the “stripped” principal is also known as a zero-coupon security.
STRIPS stands for Separate Trading of Registered Interest and Principal of Securities.
Also see the information page with an example for STRIPS.
- See Treasury bill
- See Treasury bond
- See Treasury note
- Tax form
- See 1099-INT
- Tentative auction schedule
Every quarter (February, May, August, November), we post a tentative schedule for the auctions we will hold during the next 6 months. Although the schedule may change (is tentative), we are usually able to keep to it.
See the current tentative auction schedule (PDF).
For Treasury marketable securities, “term” means the length of time that the security earns interest. This is the same as its time to maturity.
We refer to marketables with their term and type. Examples: 3-year T-Note; 30-year TIPS.
Transfer means “to move.”
You may want to transfer all of part of one or more Treasury marketable securities for various ways, including
- from one TreasuryDirect account to another:
Transfer Treasury marketable securities to another TreasuryDirect account (TD How do I?)
- from a Legacy Treasury Direct account to a TreasuryDirect account
Transfer securities from Legacy Treasury Direct (TD How do I?)
- from a banker, broker, or dealer to your TreasuryDirect account
Transferring a Treasury marketable security
- from your TreasuryDirect account to a banker, broker, or dealer
Transfer Treasury marketable securities outside of TreasuryDirect (TD How do I?)
- from one TreasuryDirect account to another:
- Treasury bill (T-Bill)
Treasury bills are the Treasury marketable security with the shortest term. Regular T-Bills are for 4, 8, 13, 17, 26, or 52 weeks.
We also sometimes auction a type of T-Bill called a Cash Management Bill, where the term may be just a few days to hundreds of days.
In most auctions for T-Bills, the price you pay is less than the par amount of the T-Bill. Thus, you buy the T-Bill at a discount. When the bill matures (finishes its term), you get the par amount. The difference between what you paid (with the discount) and the par amount is the interest you earned for your investment.
See the information page about T-Bills.
- Treasury bond (T-Bond)
Treasury bonds are a Treasury marketable security with a term of 20 or 20 years.
T-Bonds and savings bonds are not the same. T-Bonds are Treasury marketable securities. Savings bonds are not marketable (can’t be sold). Also, other sources, such as cities, sell other types of bonds. When you hear or read “bond,” be sure to find out whether that is about Treasury bonds (marketable), Treasury savings bonds, or bonds from some other source.
See the information page about T-Bonds.
- TreasuryDirect account
In TreasuryDirect, you have a personal account with all your electronic Treasury securities (marketables and savings bonds). You can link your main account to one or more (sub)accounts, including
- Treasury Inflation-Protected Securities (TIPS)
TIPS are a Treasury marketable security with a term of 5, 10, or 30 years.
TIPS are special because we use a relevant part of the Consumer Price Index to adjust the value of your TIPS due to inflation (or deflation). The interest you get every 6 months is based on your inflation-adjusted principal.
When a TIPS matures, you get the inflation-adjusted principal or the original principal, whichever is larger.
- Treasury reopenings
- See Reopenings
- Trust, trustee, trustor
A trust is a legal entity where one person is in charge of property (such as Treasury marketable securities) with the obligation to use that property for the benefit of someone else.
The person who is in charge of the trust is the trustee. The trustee manages or administers the trust.
The person (or sometimes an institution or organization) that creates the trust is the trustor. Other words for the trustor are maker, donor, grantor, settler.
Trusts are a type of entity that may have an entity account in TreasuryDirect. The trustee opens and manages the entity account for a trust.
- Undelivered payment
When it is time to send you money, we use the information we have from you to send that money to your bank or other financial institution. If the payment does not go through and is returned to us, it becomes an “undelivered payment.” In TreasuryDirect the funds are returned to the C of I within the TreasuryDirect account. For other types of payments, customer service will contact the customer to obtain new banking information to send the funds again
- View rights
You grant View rights to someone for a Treasury marketable security you hold in TreasuryDirect
- Withholding, withholding rate
You may be used to having an employer send some of your income to the IRS so that you are paying some of the tax you will owe before it is due. Your employer is “withholding” money from your pay, sending it in for you, and thus lowering the amount you will need to have on hand to pay your taxes later.
We can help you in the same way: When you will owe tax on the money you earn from your Treasury marketable securities, you can ask us to withhold some of the money and pay it to the IRS on your behalf.
- Yield, yield to maturity
When talking about finances, “yield” means “what you get.” That is similar to the way “yield” is used in farming: This field yields 1,000 bushels of corn.
For Treasury marketable securities, the yield is the annual (yearly) return on your investment.
For details and examples, see Understanding pricing.
- Yield from issue date
Yield from issue date is a percentage expressed as an annual rate that describes the overall increase in the value of your Treasury marketable security. It measures the gain from the time we issued the security.
To get the yield from issue date, we use
- the amount of the initial investment
- what the investment is worth on some later date--today or in the future, and
- the amount of time from when the investment was made to the later date
- Zero-coupon security
- See STRIPS
- Zero-percent certificate of indebtedness (C of I)
A certificate of indebtedness is a special type of security in your TreasuryDirect account. It does not earn interest (thus, zero-percent).
It is a holding place where you put money to pay for Treasury marketable securities and savings bonds.
You can put money in your C of I from your bank account. You can use your C of I as the place for us to put money we owe you when a Treasury marketable security matures.
You can send money from your C of I to your bank account.