DEFINITION of 'Treasury Direct'

The online market through which investors can purchase federal government securities directly from the U.S. Treasury. Treasury Direct sells Treasury bills, notes, bonds, Treasury inflation-protected securities (TIPS) and savings bonds, all of which are backed by the full faith and credit of the U.S. government and are used to finance the federal debt.

BREAKING DOWN 'Treasury Direct'

The online Treasury Direct trading system eliminates banks, brokers and dealers as middlemen, saving investors money on commissions and fees. Investors can still purchase Treasury securities through these traditional channels if they wish.

Treasury securities are sold through an auction process, and this process establishes a security’s rate and yield. Investors can place either competitive or non-competitive bids. Competitive bidders specify the rate, yield or discount margin the investor will accept; non-competitive bidders agree to accept the rate, yield or discount margin that the auction establishes. At the auction’s close, the Treasury first issues securities to all non-competitive bidders, then to competitive bidders from lowest to highest bid, until it has issued the total amount of securities provided for by that auction. All accepted bidders receive the terms of the highest accepted offer. The minimum required investment in the Treasury Direct market is $100.

The online Treasury Direct system is the main way the U.S. Treasury sells its securities. To open a Treasury Direct account, investors must have a Social Security number or taxpayer identification number, a U.S. address, a checking or savings account for transferring funds to and from a Treasury Direct account, an email address and a secure Web browser and Internet connection. Individuals, institutions, corporations, partnerships, limited liability companies, sole proprietors, estates and trusts can also have Treasury Direct accounts.

Find out how your tax refund can go directly towards the purchase of Treasury Direct securities; check out What are the benefits of splitting my tax refund?

RELATED TERMS
  1. Treasury Yield

    The return on investment, expressed as a percentage, on the debt ...
  2. Direct Bidder

    An entity that purchases Treasury securities at auction for a ...
  3. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with ...
  4. 30-Year Treasury

    A U.S. Treasury debt obligation that has a maturity of 30 years. ...
  5. Treasury General Account

    The general checking account used by the Department of the Treasury. ...
  6. 10-Year Treasury Note

    A debt obligation issued by the United States government that ...
Related Articles
  1. Investing

    Buy Treasuries Directly From The Fed

    If you want government securities, go straight to the source. We'll show you how.
  2. Investing

    Introduction to Treasury Securities

    Purchasing bonds that are backed by the full faith and credit of the U.S. government can provide steady guaranteed income and peace of mind. Knowing the characteristics of each type of treasury ...
  3. Investing

    Understanding Treasury Yield

    Treasury yield refers to the return on an investment in a U.S. government debt obligation, such as a bill, note or bond.
  4. Investing

    What's a T Bond?

    Treasury bonds, or T-bonds, are marketable securities issued by the US government, and are available in increments of $100. Bonds have a maturity range of ten to 30 years, with 30 being the most ...
  5. Investing

    The Importance Of U.S. Treasury Rates

    U.S. Treasury bond interest rates affect more than just bondholders! It impacts the day to day lives of all consumers.
  6. Investing

    What is Treasury Stock?

    Treasury stock is a company’s own stock that it holds in its treasury for later use.
  7. Investing

    What's a 10-Year Treasury Note?

    A 10-year Treasury note is an intermediate debt obligation issued by the United States government, and with a ten-year maturity date.
  8. Investing

    The Treasury And The Federal Reserve

    Find out how these two agencies create policies to stimulate the economy in tough economic times.
  9. Financial Advisor

    Top 4 Treasurys ETFs (SHY, IEI)

    Learn about the specifics of the top four U.S. Treasury ETFs and how investors can buy ETFs that invest in bonds along the yield curve.
RELATED FAQS
  1. Why are treasury bond yields important to investors of other securities?

    Learn about the wide-ranging impact of U.S. Treasury Bond yields on all other interest-bearing instruments in the economy ... Read Answer >>
  2. Which economic factors impact treasury yields?

    Discover the economic factors that impact Treasury yields. Treasury yields are the benchmark yield for the rest of the world, ... Read Answer >>
  3. What are the maturity terms for Treasury bonds?

    Learn how treasury bonds pay interest, when they reach maturity and the differences between terms for treasury bonds and ... Read Answer >>
  4. What is the difference between the Daily Treasury Long-Term Rates and the Daily Treasury ...

    Find out more about the daily Treasury long-term rates, daily Treasury yield curve rates and the difference between these ... Read Answer >>
Hot Definitions
  1. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  2. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  3. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  4. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
  5. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly AIMR) that measures the competence and integrity of financial ...
  6. Initial Coin Offering (ICO)

    An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture.
Trading Center