New Treasury bills, notes and bonds are issued at auction. After that, they trade on the secondary market until they mature. This page explains how that market works for individual investors and what the quotes mean.
Auction vs secondary market
At auction, Treasury sets the yield from the bids it receives; see recent results on the auction results hub and this week's auction board. Once issued, the same securities trade between dealers and investors over the counter. Individuals reach that market through a brokerage account.
Bid, ask and spread
A quote has two sides. The bid is the price a dealer will pay you; the ask is the price at which a dealer will let you acquire the security. The gap between them is the spread, a cost of trading. Recently issued securities usually have the tightest spreads.
Price and yield move in opposite directions
When market yields rise, the price of an existing security falls, and when yields fall, its price rises. The longer the time to maturity, the larger the price move for a given change in yield. The yield curve page shows the current shape across maturities.
Accrued interest
Notes and bonds pay interest every six months. If you acquire one between payment dates, you pay the prior holder the interest earned since the last payment, and you receive the full next payment. Bills pay no coupon, so there is no accrued interest; the return is the gap between price and face value.
TreasuryDirect and the secondary market
TreasuryDirect handles auction purchases and holds securities to maturity. It does not trade on the secondary market. To exit early, you transfer the security to a brokerage, which Treasury allows after a minimum holding period, then offer it there. See TreasuryDirect vs a brokerage for the tradeoffs.
Research tools
To follow yields, funds and your own holdings in one place, Stock Rover offers research and portfolio tools.
Affiliate disclosure. The Stock Rover link below is an affiliate link. YieldDocket may earn a commission if you sign up, at no extra cost to you. It never changes the data we publish. How we get paid. Educational data, not investment advice.
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Frequently asked questions
Can I exit a T-bill before it matures?
Yes, through a brokerage on the secondary market at the current bid. Bills held at TreasuryDirect must be transferred to a brokerage first.
Why did my Treasury's price drop?
Market yields rose after you acquired it. If you hold to maturity, you still receive face value.
Do I pay state tax on secondary market Treasuries?
Interest on Treasury bills, notes and bonds is exempt from state and local income tax, whether acquired at auction or on the secondary market.
See how we source the data and the guides hub. Educational, not investment advice.