Treasury floating rate notes (FRNs) explained
- Current spread0.050%91282CRD5, set Jul 29
- Index input4.095%13-wk bill, Oct 19
- Next new FRNOct 28$30B 2-year
A Treasury FRN is a 2-year note whose interest rate resets every week: a 13-week T-bill index rate plus a fixed spread set at auction.
Here is how TreasuryDirect defines each piece, with every 2-year FRN auction of the past year.
U.S. Treasury securities: not FDIC-insured · not bank deposits · market value can change before maturity
Next: a new 2-year FRN (CUSIP 91282CRS2, $30B) is scheduled for auction on Oct 28, 2026, issuing Nov 2, 2026 and maturing Oct 31, 2028 (Treasury announcement). Its spread will be set at that auction.
FRNs at a glance
| Feature | TreasuryDirect |
|---|---|
| Term | Two years |
| Interest paid | Every three months until maturity |
| Interest rate | Index rate + spread; the index resets weekly |
| Minimum amount | $100, in $100 increments |
| Non-competitive bid limit | $10 million |
| Original issues | January, April, July, October (reopenings in other months) |
| Taxes | Federal tax each year on interest; no state or local tax |
| Eligible for STRIPS | No |
Source: TreasuryDirect, Floating Rate Notes, checked Oct 24, 2026.
How the rate is built
TreasuryDirect describes two parts. The index rate is tied to the highest accepted discount rate of the most recent 13-week Treasury bill auction, so it resets every week. The spread is the highest accepted discount margin at the auction where the FRN is first offered, and it stays the same for the life of the note. The rate applied is index plus spread, accrued every day on par value and paid quarterly (TreasuryDirect).
Illustration only: the Oct 19, 2026 13-week bill auction had a high discount rate of 4.095% (results PDF). Adding the 0.050% spread of FRN 91282CRD5 gives 4.145%. The exact daily index and accrual dates are in TreasuryDirect's FRN daily indexes; that table, not this sum, is the official rate.
Because the rate follows 13-week bill auctions, an FRN's income rises and falls with short-term bill rates over its two years. A fixed-rate 2-year note locks its coupon at auction instead; see the 2-year note auction results for comparison.
Discount margin vs spread
At a new-issue auction the high discount margin becomes the spread, so the price is close to $100. At a reopening the spread is already fixed; bidders set a new discount margin, and the price moves above $100 when the margin clears below the spread and below $100 when it clears above it. The table shows both cases.
2-year FRN auctions, past year
| Auction | Term | High discount margin | Spread | Bid-to-cover |
|---|---|---|---|---|
| 1-Year 10-Month (reopening) | 0.040% | 0.050% | 2.63 | |
| 1-Year 11-Month (reopening) | 0.055% | 0.050% | 3.14 | |
| 2-Year | 0.050% | 0.050% | 3.37 | |
| 1-Year 10-Month (reopening) | 0.079% | 0.103% | 2.99 | |
| 1-Year 11-Month (reopening) | 0.089% | 0.103% | 3.49 | |
| 2-Year | 0.103% | 0.103% | 3.52 | |
| 1-Year 10-Month (reopening) | 0.115% | 0.099% | 2.78 | |
| 1-Year 11-Month (reopening) | 0.099% | 0.099% | 3.01 | |
| 2-Year | 0.099% | 0.099% | 3.16 | |
| 1-Year 10-Month (reopening) | 0.139% | 0.190% | 3.75 | |
| 1-Year 11-Month (reopening) | 0.168% | 0.190% | 3.03 | |
| 2-Year | 0.190% | 0.190% | 3.63 |
Source: TreasuryDirect auction data (TA_WS securities feed), checked Oct 24, 2026; each row links the official results PDF.
Related: 2-year FRN auction results (full history) · TIPS explained · T-bill calculator · this week's Treasury auctions · Treasury yield curve.
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Frequently asked questions
How is a Treasury FRN interest rate set?
TreasuryDirect: the rate is an index rate plus a spread. The index is tied to the highest accepted discount rate of the most recent 13-week bill auction and resets every week; the spread is fixed for the life of the FRN.
Where does the spread come from?
TreasuryDirect: the spread is the highest accepted discount margin at the auction where the FRN is first offered. Reopenings of the same FRN keep that spread, though their discount margin, and so their price, can differ.
How often does a Treasury FRN pay interest?
Every three months until maturity, according to TreasuryDirect. Interest accrues daily on the par value.
How long is a Treasury FRN?
Two years. Treasury issues new FRNs in January, April, July and October and reopens them in the other months.
Are FRN interest payments taxed by states?
TreasuryDirect: federal tax is due each year on the interest; there is no state or local income tax.
Is this investment advice?
No. This page explains how Treasury defines the security and shows published auction data.