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RESEARCH CENTER

Floating Rate Notes (FRNs): How To Buy

The U.S. Treasury began issuing Floating Rate Notes (FRNs) in January 2014. You can buy the securities two ways: one, through TreasuryDirect, directly from us; or, two, through a bank or broker.

FRNs may sell at par, discount, or premium, and the price may include accrued interest. For more information, see Floating Rate Notes: Rates and Terms.

Buying Directly From the U.S. Treasury

To buy FRNs directly from us, you must:

  • Have an account in TreasuryDirect. To open an account, go to "Open An Account" and supply the requested information
  • Bid noncompetitively. With a noncompetitive bid, you agree to accept the high discount margin determined at auction. If you bid this way, you are guaranteed to receive the security you want, in the amount you want.

Submit a Bid in TreasuryDirect

To bid in TreasuryDirect, login to your account and choose either BuyDirect® or Purchase Express. Follow the prompts to specify the security you want, the purchase amount, and other requested information.

Payments and Receipts in TreasuryDirect

When you buy an FRN in TreasuryDirect, we withdraw the purchase price from the source of funds you specify, which could be your bank account or your Certificate of Indebtedness (C of I). When the FRN matures, we deposit payments into your bank account or your C of I, whichever you specify.

Buying Through a Bank, Broker, or Dealer

With a bank or broker, you can bid noncompetitively or competitively. With a competitive bid, you specify the discount margin you will accept. If you bid this way, you may or may not receive the security you want, and, if you receive it, you may receive it in less than the amount you want. Your bid will be fully awarded if the discount margin you bid is less than the high discount margin set by the auction, partially awarded if the discount margin you bid is equal to the high discount margin, or not awarded if the discount margin you bid is above the high discount margin.

For more information consult a bank or broker.