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TreasuryDirect Review review, fees for U.S. bills, treasury notes, TIPS, savings bonds investing account. Opening requirements, pros/cons, taxes, rates. Overview

TreasuryDirect is an online market created by the US. Department of the Treasury. It's a place where investors can buy federal government securities directly from the U.S. Treasury, hence the name TreasuryDirect.

Opening a TreasuryDirect account

There are two different kinds of accounts that an investor can open on TreasuryDirect. The two being individual and entity respectively, both of which are free. Individuals are American citizens and entities are businesses, organizations, trusts and so on.

Creating a TreasuryDirect account is surprisingly easy and takes no more than 30 minutes.  All someone needs to open an account is:

  • A social security/taxpayer identification number
  • A bank account, either savings or checking
  • Drivers license
  • An e-mail address
  • Internet access
  • A U.S. address
  • Be over the age of 18

That's right, there is absolutely no paper work, driving or waiting around in lobbies involved in the account creation process.

Once an account is open and a bank account with money is linked to it, investing and purchasing of government securities can begin.

Treasury Direct Account Review


3 Different kinds of securities available

There are 3 different kinds of government securities available to an account holder for investment. These 3 being marketable securities, savings bonds, and zero-percent certificates of indebtedness.

Marketable securities

Investors buy all their securities from auctions, which are scheduled on pre-determined dates. This means that investors usually don't receive their investments until a few days after the auction ends, not the date a bid is placed.

Investors can choose to bid either competitively or non-competitively. Generally speaking, only experienced investors & big firms bid competitively.

Those who do bid competitively decide the interest rate, yield or discount margin that they wish to receive, whereas those who bid non-competitively take whatever rates the auction decides upon.

There are four different kinds of marketable securities available on the TreasuryDirect website along with one debt instrument. All of which are available in $100 increments .

1. The first marketable security offered is treasury bills, which are short term securities that mature in as soon as 4 weeks to 1 year max. Treasury bills are an easy, risk free way to make a few bucks.

2. The second marketable security offered is treasury notes. These are basically treasury bills that mature between 2 to 10 years. Treasury notes are similar to treasury bills, except they have longer maturities and generally earn their owner's more money upon maturity.

3. The third marketable security offered is treasury bonds. Treasury bonds are currently only sold at 30 year terms. Likewise, treasury bonds take considerably much longer to mature than both treasury bills and notes, but do tend to have a higher payout.

4. Finally there's T.I.P.S. bonds & notes. (treasury inflation-protected securities.) These are currently offered at terms between 2 year to 30 year on the TreasuryDirect website.

*There isn't much money to gain from investing in T.I.P.S, the only advantage with these is that they protect an investor against inflation.

5. The debt instrument offered under this category would be the F.R.N. (medium-term floating rate notes.) These are sold at 2 year terms and come with a variable interest rate. If interest rates rise, the interest payments for F.R.N.'s increase, meanwhile if interest rates fall, payments decrease.

So don't go investing in F.R.N.'s unless interest rates are going to rise, which coincidentally they are as of 8/26/2018.

That's it for marketable securities, but wait, there's more!  

Savings Bonds

There are only two kinds of savings bonds offered to TreasuryDirect account holders. Series EE and Series I bonds, both starting out at $100.

Series EE bonds come with a fixed interest rate, whereas series I bonds come with a combination interested rate of a fixed/inflation rate.

In plain English, that means people who buy Series I bonds earn money from a fixed interest rate for the life of the bond. They also earn money from a variable rate, the current CPI, (consumer price index) which the government adjust every 6 months.

The only difference between these two savings bonds is that Series EE bonds are slightly safer to invest in. That's because there is a guarantee that they will double in value after 20 years, whereas Series I bonds are not a risk free investment.

Zero-Percent Certificates of Indebtedness

These are basically containers that people can put their money into which will then allow them to use that money to buy securities. They earn no interest and you can invest any amount of money into the certificates.

These would have been all the rage during the great depression!  

Now that the main features of TreasuryDirect have been examined, let's look at the pros & cons.

Treasury Direct Review

Pros of TreasuryDirect

- Free to open an account

- No fees

- Takes no more than 30 minutes to open an account

- All investments are backed by the U.S. government

- No state/local taxes to pay, only federal

- Open 24/7

Cons of TreasuryDirect

- Logging in to an account can be a hassle due to the account security perimeters.

- If someone is logged in to TreasuryDirect and then presses the back button on their browser, they will have to repeat the login process.

Treasury Direct Review Summary

Those who aren't good at keeping up with their passwords, login credentials and emails will have a hard time using TreasuryDirect. This is due to the unforgiving security measures that are in place. Yet, for most Americans TreasuryDirect is still the easiest way to invest money. Not to mention the most patriotic! reviewed by on . Rating: 4