What Is TreasuryDirect?
TreasuryDirect is the online platform through which investors can purchase federal government securities directly from the U.S. Treasury.
- TreasuryDirect is the online platform through which investors can purchase federal government securities directly from the U.S. Treasury.
- New issues of U.S. Treasury bills, notes, bonds, savings bonds, and TIPS are all available from TreasuryDirect.
- TreasuryDirect saves investors from paying commissions and fees, by eliminating middlemen such as brokers and banks.
- To open a TreasuryDirect account, investors must have a Social Security number or EIN, a U.S. address, and a checking or savings account.
TreasuryDirect 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.
The TreasuryDirect website is the main portal through which the U.S. Treasury sells its securities. In effect, TreasuryDirect is the only way investors can purchase and redeem Treasury securities directly from the government in paperless electronic form. Through the website, money can be deposited from and withdrawn to personal bank accounts, and repurchase of securities can be rolled over as currently held securities mature.
The types of Treasury securities available through TreasuryDirect include:
- Treasury bills
- Treasury notes
- Treasury bonds
- Series I savings bonds
- Series EE savings bonds
- Treasury Inflation-Protected Securities (TIPS)
The TreasuryDirect trading system eliminates banks, brokers, and dealers as middlemen, saving investors money on commissions and fees.
The minimum required investment in the TreasuryDirect market
Treasury securities are sold through an auction process, which 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 that they 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 the 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 TreasuryDirect market is $100.
How to Open a TreasuryDirect Account
To open a TreasuryDirect account, investors must have a Social Security number or Employer Identification Number (EIN), a U.S. address, a checking or savings account for transferring funds to and from a TreasuryDirect account, an email address, and a secure web browser and internet connection. Individuals, institutions, corporations, partnerships, limited liability companies (LLCs), sole proprietors, estates, and trusts can also establish TreasuryDirect accounts.
You can request the IRS or your state tax department to deposit your tax refund straight into your TreasuryDirect account and use the funds to purchase securities.
Of course, investors can still purchase Treasury securities through traditional channels, like brokerages or banks, even if they set up a TreasuryDirect account; however, financial professionals cannot buy securities for clients through the system.
Special Considerations for Treasury Direct
Only new issues can be bought through TreasuryDirect. Treasury securities typically follow a schedule to release these new issues, also known as on-the-run Treasuries. Treasuries issued before the most recently issued bond or note of a particular maturity are referred to as off-the-run Treasuries as they are taken off TreasuryDirect. For example, the 52-week bill is auctioned every four weeks, at which time the previously existing 52-week bills will only be available for trading in the secondary market.