Treasury Notes (T-Notes) Information

Treasury notes are issued in terms of 2, 3, 5, 7, and 10 years, and pay interest every six months until they mature. The price of a note may be greater than, less than, or equal to the face value of the note.

The price of a fixed rate security depends on its yield to maturity and the interest rate. If the yield to maturity (YTM) is greater than the interest rate, the price will be less than par value; if the YTM is equal to the interest rate, the price will be equal to par; if the YTM is less than the interest rate, the price will be greater than par. When a note matures, you are paid its face value.

Notes are sold in TreasuryDirect and Legacy Treasury Direct, and by banks, brokers, and dealers.

In a reopening, Treasury Direct auction additional amounts of a previously issued security. Reopened securities have the same maturity date and interest rate as the original securities, but a different issue date and usually a different price.

When you buy a reopened security, you have to pay a premium if the price of the security at reopening is greater than the face value of the security. The price of the reopened security will be determined at auction. Because the security is being auctioned at two separate times, market conditions probably won't be the same and, therefore, the prices likely won't be the same either.

When you buy a reopened security, regardless of its price, you may have to pay accrued interest. That is interest the security earns from the original issue date of the security until the date the security is issued to you. The accrued interest is payed back to you in your first semiannual interest payment.

These notes are reopenings: the 10-year notes Treasury Direct auctions are in January, March, April, June, July, September, October, and December.

All Treasury notes are now issued and held electronically. Paper notes were issued in the past, but all of them have matured.