Treasury bond

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T-bonds are long-term debt securities with at-issue maturities of more than 10 years.

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A Treasury bond (T-bond) is a form of Treasury debt security backed by the full faith and credit of the U.S. government. T-bonds are long-term debt securities with at-issue maturities of more than 10 years. As of 2026, the U.S. Treasury issues 20-year and 30-year bonds, with the 30-year serving as the benchmark long-term rate.

Treasury bonds have evolved over time. For much of the 20th century, the longest maturity was typically 25 years. In 1977, the Treasury introduced the 30-year bond, which became the standard “long bond” benchmark. Although issuance has shifted at times—including a pause from 2001 until early 2006, when the Treasury stopped issuing new 30-year bonds amid budget surpluses—the 30-year bond remains the primary reference point for long-term U.S. interest rates.

The interest rate varies from auction to auction. Yields were in the 4% to 5% range through much of the 2020s, though they fell as low as 1% during the COVID-19 recession of 2020 (see figure 1).

Investors in T-bonds receive interest payments (coupons) every six months until maturity. These payments are exempt from state and local taxes, though not federal taxes.

Because T-bonds have longer maturities than other Treasury securities, they are more sensitive to changes in interest rates. If interest rates rise after you purchase T-bonds, you may have to sell them for less than face value if you don’t hold them to maturity. Bond traders refer to this as a discount to par value.

For example, suppose you buy a $1,000 Treasury bond that pays 3% interest. If new bonds are later issued at 4%, your bond becomes less attractive. To sell it, you may have to accept less than $1,000 so that its effective yield matches current market rates.

Although T-bonds tend to offer lower yields than corporate bonds with comparable maturities, they have a reputation as a reliable asset, with little risk of default. For that reason investors use them as a long-term, safe asset in portfolios.

Yields on Treasury bonds—as well as other Treasury securities across all maturities—are set through an ongoing series of auctions that are open to financial firms and some individuals. Each quarter, the Treasury announces an estimate of how much debt of each maturity it intends to sell. At the auction, the more active the bidding is, the lower the yield the Treasury can afford to offer. When the government borrows more than the market expects, on the other hand, the Treasury may have to raise yields to sell the bonds. 

Uncertainty in the broader markets can also drive demand for T-bonds, which—as they are backed by the full faith and credit of the U.S. government—have been considered among the safest investments available. T-bonds are a staple of trillion-dollar sovereign wealth funds, the Federal Reserve, pension funds, bank balance sheets, and retirement savers.

For investors, they continue to offer stability and liquidity to play a stabilizing role within a diversified portfolio.