You can buy government bonds directly from the U.S. Treasury, through a bank or brokerage, or from a bond dealer

The simplest route for most people is TreasuryDirect, the federal government's online platform where you buy bonds straight from the U.S. Department of the Treasury with no middleman and no fees. You create an account, fund it from a bank account, and purchase bonds in denominations as small as $100. The other main routes are a traditional brokerage account (like Fidelity, Schwab, or Vanguard), a bank, or a bond dealer — all of which charge a commission or markup, but offer more flexibility if you want to sell before maturity or buy older bonds already in circulation.

Which route makes sense depends on what you're buying, how long you plan to hold it, and whether you want to actively trade. TreasuryDirect works well for someone buying new Treasury bills, notes, or bonds and holding them to maturity. A brokerage account gives you access to a wider range of bonds and the ability to sell whenever you want, but you'll pay for that convenience.

Key Takeaways

  • TreasuryDirect is free and lets you buy new Treasury bonds directly from the government in amounts as small as $100, with no commission or fees.
  • Brokerages like Fidelity and Schwab charge a commission per trade but let you buy older bonds already trading on the secondary market and sell before maturity.
  • Banks can sell you Treasury bonds but typically charge a markup and offer less selection than brokerages or TreasuryDirect.
  • You need a bank account to fund any purchase, and TreasuryDirect requires a Social Security number and U.S. address.

Buying directly through TreasuryDirect

TreasuryDirect is the U.S. Treasury's own platform, and it's the cheapest way to buy new Treasury securities if you plan to hold them to maturity. You go to treasurydirect.gov, create an account with your Social Security number and a valid U.S. address, link a bank account, and bid on Treasury bills, notes, or bonds during their regular auction cycles. The Treasury holds auctions on a predictable schedule — bills weekly, notes and bonds monthly — and you can set up recurring purchases if you want.

The main limitation is that TreasuryDirect only sells new securities at auction. You cannot buy older bonds that are already trading on the secondary market, and if you need to sell before maturity, you have to transfer the bond to a brokerage first, which takes time and may involve a fee. For someone buying and holding, this is not a problem. For someone who wants flexibility or access to a wider range of bonds, it's a real constraint.

Buying through a brokerage account

A brokerage like Fidelity, Charles Schwab, Vanguard, or E*TRADE lets you buy both new Treasury securities and older bonds already trading on the secondary market. You open a regular investment account, fund it from your bank, and search for bonds by type, maturity date, and yield. The brokerage executes the trade and charges you a commission — typically $1 to $10 per bond, depending on the firm and the bond type.

The advantage is flexibility: you can sell any bond before maturity without transferring it elsewhere, you can browse hundreds of bonds at once and compare prices, and you can hold stocks, mutual funds, and other investments in the same account. The disadvantage is cost — that commission adds up if you're buying small amounts or trading frequently. Many brokerages also offer bond mutual funds or exchange-traded funds (ETFs) that track Treasury bonds, which can be cheaper if you're buying a small amount and want instant diversification.

Buying through a bank

Most banks can order Treasury bonds for you, but they typically charge a markup on top of the bond's price — usually $25 to $100 per bond — and their selection is limited compared to a brokerage. Banks are convenient if you already have a relationship there and want to keep everything in one place, but you'll pay more for that convenience. Some banks also offer Treasury bond mutual funds or CDs (certificates of deposit) that track Treasury rates, which may be a simpler option if you're new to bonds.

If you're buying a large amount or plan to hold for a long time, the markup can add up significantly. For example, a $10,000 bond with a $50 markup costs you an extra 0.5% in fees right away. That's why TreasuryDirect or a discount brokerage is usually the better choice unless the bank is offering something specific you need.

Understanding the cost difference between routes

TreasuryDirect costs nothing — no commission, no markup, no annual fees. A brokerage typically charges $1 to $10 per bond, which works out to 0.1% to 1% of the bond's value depending on the size. A bank markup is usually $25 to $100 per bond, or 0.25% to 1% of the value. On a $10,000 bond, that's the difference between $0 (TreasuryDirect), $10 to $100 (brokerage), and $25 to $100 (bank).

The cost matters most if you're buying small amounts or trading frequently. If you're buying $100,000 in bonds and holding them for years, the difference between a $10 commission and a $50 markup is noise. If you're buying $1,000 and plan to sell in six months, that $50 markup or $10 commission is a real drag on your return. Run the math for your specific situation before you choose a route.

What you need to get your free guide

For TreasuryDirect, you need a valid Social Security number, a U.S. mailing address, and a U.S. bank account to fund purchases. You create an account online, verify your identity, and link your bank account — the whole process takes 15 to 30 minutes. For a brokerage or bank, the requirements are similar: a Social Security number, a U.S. address, and a bank account to fund the investment account. Most brokerages also ask for employment information and investment experience, though they're not strict about it.

All three routes require you to have money in the account before you can buy. TreasuryDirect transfers money from your bank account when you place an order. A brokerage or bank requires you to fund the account first, then place the order. Plan for a few business days for the money to settle before you can invest it.

Secondary market bonds versus new auction bonds

When you buy through TreasuryDirect, you're buying new bonds directly from the Treasury at auction. When you buy through a brokerage or bank, you can buy new bonds at auction or older bonds already trading on the secondary market — meaning bonds that other investors are selling before maturity. Secondary market bonds may have different prices and yields than new bonds, depending on how interest rates have moved since they were issued.

TreasuryDirect is simpler if you just want to buy and hold. The secondary market is useful if you want a specific maturity date that's not currently being auctioned, or if you want to sell before maturity. Most individual investors don't need the secondary market, but it's there if you do.

Frequently Asked Questions

Can I buy Treasury bonds with less than $100?

TreasuryDirect requires a minimum of $100 per purchase. Brokerages and banks may have different minimums — some allow smaller amounts, others require $1,000 or more. Check with your specific provider. If you want to invest smaller amounts regularly, a Treasury bond mutual fund or ETF may be a better fit.

What happens if I need to sell my bond before it matures?

If you bought through TreasuryDirect, you have to transfer the bond to a brokerage first, which can take a few days and may involve a fee. If you bought through a brokerage, you can sell immediately during market hours. The price you get depends on current interest rates — if rates have risen since you bought, your bond is worth less; if rates have fallen, it's worth more.

Do I pay taxes on Treasury bond interest?

Yes. Interest from Treasury bonds is subject to federal income tax but exempt from state and local income tax. You report the interest on your federal tax return each year. This is true regardless of where you bought the bond.

Is TreasuryDirect safe?

Yes. TreasuryDirect is run by the U.S. Department of the Treasury, and your bonds are held in a government account in your name. There's no brokerage or bank in the middle, so there's no risk of the firm going under or losing your bonds.

Can I set up automatic purchases through TreasuryDirect?

Yes. TreasuryDirect lets you set up recurring purchases for Treasury bills, notes, or bonds on their regular auction schedule. You can buy the same amount every month or every quarter, which is useful if you want to invest a fixed amount regularly without having to log in each time.