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Hello and welcome to TreasuryDirect.

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Let's talk about Treasury Bills,
Treasury Notes, and Treasury Bonds.

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These are all forms
of Marketable Securities.

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If you are new to the Marketable
Securities world, I would recommend

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you watch the video titled
What Are Marketable Securities?

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which can be found on the same page
as this video.

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Let's start with Treasury Bills.

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These are short term Securities
being offered in terms of four, eight,

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13, 17, 26, and 52 weeks.

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These are typically sold below par amount
and the interest earned is calculated

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based on the difference between
the purchase price and the par amount.

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The greater the difference between
the purchase price and the par amount,

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the greater returns
you earn on the Securities.

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You do need to purchase
these Securities in increments of $100

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up to the noncompetitive
limit of $10 million per auction.

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The shorter
term Bills are auctioned each week,

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while the 52 week Bills are auctioned
every four weeks.

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When a Bill reaches maturity,

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you will need to report the interest
earned as federal income tax.

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A 1099 will appear in your TreasuryDirect
account the following January.

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Treasury Notes

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are a medium term Security
being offered in two, three,

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five, seven and ten year terms.

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The interest rate for
these Notes will be set at the auction

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based on the competitive bids received.
Like the Bills we discussed earlier.

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You must purchase in increments of $100 up

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to the $10 million limit per auction.

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One thing that makes the Notes
different from

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Bills is the way interest is earned.

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The interest rate is set at auction

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and remains
fixed for the life of the Note.

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Interest is accrued on the Note
and is paid out every six months,

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which will need to be reported
as earned income on your federal taxes.

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Treasury Bonds are a long term

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Security with terms of 20 and 30 years.

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These are not the same
as Savings Bonds, such

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as the Series EE or I.

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Those Savings
Bonds are not able to be bought

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or sold through the secondary market,

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unlike Treasury Bonds, which can be bought
or sold through the marketplace

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typically by a broker or dealer.
Like the Notes, the Treasury Bonds

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earn interest over the life of the Bond,
which is paid out every six months.

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Because you cannot redeem Treasury Notes
or Bonds prior to their maturity date,

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the only way to cash them out
before the end of their term

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is to sell them on the secondary market.
Like the Note,

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interest is accrued on the Bond
and is paid out every six months,

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which will need to be reported
as earned income on your federal taxes.

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More information
can be found for each type of Marketable

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Security
on the TreasuryDirect.Gov website

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under the Treasury
Marketable Securities tab.

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And that's it.

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That is the basics of Treasury
Bills, Notes, and Bonds.