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Government bonds are one of the safest places to park cash. This is because they are backed by the full faith and credit of the U.S. government, so there’s virtually no risk of default. The tradeoff for safety, of course, is low interest rates. But you can at least cut any fees or commissions by buying Treasury securities directly through TreasuryDirect, the U.S. Treasury’s online platform. If you think you can handle more risk for a higher return, you may want to consider corporate bonds or even stocks. For help, speak with a financial advisor who serves your area.

What Is TreasuryDirect, and How Does It Work?

TreasuryDirect is the U.S. Treasury’s online platform for buying federal government securities. You can purchase Treasury bills, bonds, notes, savings bonds, floating rate notes (FRNs), Series I bonds (also known as I bonds) and Treasury inflation-protected securities (TIPS) on the platform.

The idea behind TreasuryDirect is to provide a place for individuals and institutional investors to purchase Treasury securities directly from the government without having to go through a broker or another middleman. You can link your TreasuryDirect account to any personal bank account, making for a very streamlined purchasing process.

You can set up an account with TreasuryDirect online in around 10 minutes. All you’ll need to sign up is your email address, Social Security Number (SSN) or Employee Identification Number (EIN), your bank account number and your bank’s routing number. Head to the TreasuryDirect website and follow the instructions, and you’ll be ready to start purchasing bonds in no time.

TreasuryDirect Auctions


On TreasuryDirect, Treasury bills, Treasury notes, Treasury bonds, TIPS and FRNs are available through auctions. (You simply buy savings bonds —Series I and Series EE — at face value.)  Auctions happen regularly, and the Treasury Department will typically give several days notice so that anyone who wants to bid has a chance (more on bidding below). Once it announces an auction, you’ll have until the day of the auction to make your bid. Some securities follow a regular auction schedule. For instance, the 52-week Treasury bill auctions every four weeks, typically on a Thursday. Four-week, eight-week, 13-week and 26-week bills auction on a weekly basis.

A security’s auction will establish its rate (in the case of Treasury bills), yield (in the case of notes, bonds and TIPS) or discount margin (in the case of FRNs). Once it concludes, successful bidders will receive a paperless, electronic security in their TreasuryDirect account.

TreasuryDirect only auctions new securities. If you’re looking to purchase on the secondary market, you’ll need to do so from a commercial bank, investment company, brokerage firm or other financial institution.

Competitive vs. Noncompetitive Auction Bidding

When you bid on Treasury securities, you have the option of submitting a noncompetitive bid or a competitive bid. Most individual investors opt for noncompetitive bidding. With a noncompetitive bid, you are essentially saying you will accept the rate/yield/discount margin at the conclusion of the auction. You are able to spend up to $5 million on a noncompetitive bid.

With a competitive bid, you specify a rate/yield/discount margin that you will accept. Once the auction is over, you’ll receive some, all or none of your bid depending on the rate/yield/discount margin that the Treasury ends up issuing. With a competitive bid, you’re able to bid on a maximum of 35% of the securities being issued.

Once the deadline to submit bids has passed, the Treasury will issue securities to all noncompetitive bidders. Then, it will issue to the competitive bidder with the lowest rate/yield/discount margin and continue up until it runs out of securities. The rate/yield/discount margin at which it stops will be what all successful bidders receive.

Non-Auction Purchases

Government savings bonds can be purchased from TreasuryDirect without going through an auction. Savings bonds come in two forms: Series EE and Series I. Series EE bonds earn a fixed rate of return. On the other hand, Series I bonds receive interest based on a combination of a fixed rate and an inflation rate that’s calculated biannually via the Consumer Price Index For All Urban Consumers (CPI-U).

Series EE Savings Bonds

As of the beginning of 2012, the U.S. Treasury Department completely eliminated paper savings bonds in an effort to save on paper and manufacturing costs. Therefore, if you want a Series EE savings bond, you’ll need to go through TreasuryDirect. Series EE bonds are only available for purchase if you have a Social Security number and are a U.S. citizen, resident or civilian employee. The value of your bond is equal to the payment you make, meaning a $200 investment gets you a $200 savings bond.

Series I Savings Bonds

Series I savings bonds essentially adhere to the same standards as their Series EE counterparts. You customarily buy them online through TreasuryDirect with a valid Social Security number and status as a U.S. citizen, resident or civilian employee. But if you’re looking to use your tax refund to purchase bonds, the U.S. Treasury Department will grant you a paper bond. This is the only way to get paper bonds anymore, and you’ll need to file IRS Form 8888 to gain eligibility. Should you go this route, purchases must be in $50 increments.

The interest on a Series I bond issued from May 2022 through October 2022 was 9.62% – the highest yield since being introduced in 1998.

Gift Savings Bonds

Gift savings bonds are technically just a version of Series EE and Series I savings bonds. However, you will go through a slightly different process to gift them. Once they are in your possession, you need to make sure your recipient has his or her own TreasuryDirect online account. As soon as this is complete, you’ll be able to select the bond you want to gift and send it off. If you decide to go with a paper Series I savings bond, you must purchase it in the recipient’s name. You can buy gift bonds for anywhere from $25 to $10,000 each.

Bottom Line


If you’re looking for a safe place to park your cash, you may want to consider T-bills or other government securities. Since your return will be lower than the return of riskier fixed-income and equity investments, using TreasuryDirect is smart, since it cuts out the middleman — and eliminates any commissions and fees.

Tips for Smart Investing

  • If you’re new to investing or you just don’t have time to manage your portfolio, a financial advisor may be able to help you out. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • With the right asset allocation, you can balance risk with reward. For example, investors who are decades from retirement can take on more risk for the historically higher reward of stocks than bonds. On the other hand, someone nearing retirement may want to shift their portfolio weight more to bonds than stocks. SmartAsset’s asset allocation calculator can help you figure out the mix that makes the most sense for you.

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Hunter Kuffel, CEPF® Hunter Kuffel is a personal finance writer with expertise in savings, retirement and investing. Hunter is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. He graduated from the University of Notre Dame and currently lives in New York City.
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