Treasury Note and Bond Calculator
US Treasury notes and bonds are debt obligations of the US federal government sold through TreasuryDirect and the secondary market, considered among the safest investments in the world because they are backed by the full faith and credit of the United States. Treasury notes have maturities from 2 to 10 years; Treasury bonds have maturities from 20 to 30 years. Both pay a fixed coupon rate semiannually. When a Treasury security trades in the secondary market at a price different from its face value, its yield to maturity (YTM) differs from the coupon rate: a bond trading below par has a YTM higher than the coupon rate, and one trading above par has a lower YTM. The current yield is a simpler measure: annual coupon income divided by the current market price. A key advantage of Treasury interest is that it is exempt from state and local income tax, although it is subject to federal income tax. This tax treatment makes Treasuries relatively more attractive compared with equivalent-yielding taxable bonds for investors in high state-tax jurisdictions. This calculator computes the current yield, approximate yield to maturity, total interest income over the holding period, federal tax on that income, state tax saving from the exemption, and after-tax return so you can compare Treasuries to other fixed-income alternatives on an equivalent after-tax basis.
A Treasury Note with face value $10,000, coupon 4.625%, 10 years to maturity, trading at 100% of par, has a yield to maturity of --.
How yield to maturity is calculated
Yield to maturity (YTM) is the internal rate of return on a bond held to maturity. It accounts for the coupon payments, the purchase price, and the face value received at maturity. The calculator uses Newton-Raphson iteration to solve for the semiannual rate, then annualizes it. For a bond purchased at par, YTM equals the coupon rate.
Price = sum of (coupon/(1+YTM/2)^t) for t=1 to n, plus face/(1+YTM/2)^n
n = number of semiannual periods (years * 2)
coupon = face value * coupon rate / 2 (semiannual coupon)
Approximation formula (for quick estimates)
YTM ≈ (coupon + (face - price) / years) / ((face + price) / 2)
Understanding Treasury securities
Treasury securities are issued and backed by the US Government and are considered the safest debt instruments available. All Treasury interest is subject to federal income tax but is exempt from state and local income taxes, giving them a tax advantage in high-tax states.
Interest rates on new Treasury issues move based on market conditions and Federal Reserve policy. Current rates are published at TreasuryDirect.gov and in the Federal Reserve H.15 Selected Interest Rates release. If you purchase a Treasury in the secondary market, the price reflects the interest rate environment since the bond was originally issued.
For investors seeking a safe, liquid holding with predictable returns, Treasuries form the backbone of many conservative portfolios. The longer the maturity, the more sensitive the price is to interest rate changes. A 30-year bond will move more in price than a 2-year note if interest rates rise 1%.
Treasury calculator: frequently asked questions
What is the difference between a Treasury Bill, Note, and Bond?
Treasury Bills (T-Bills) mature in less than one year and are sold at a discount with no coupon payments. Treasury Notes mature in 2 to 10 years and pay interest (coupon) semiannually. Treasury Bonds mature in 20 to 30 years and also pay interest semiannually. All are issued by the US Treasury and backed by the full faith and credit of the United States government. TreasuryDirect.gov publishes all three security types.
How is yield to maturity different from coupon rate?
The coupon rate is the fixed interest rate paid on the bond at purchase. Yield to maturity (YTM) is the total return an investor receives if they hold the bond until it matures, accounting for the purchase price and any gain or loss relative to face value. If you buy at a discount (below par), your YTM is higher than the coupon rate. If you buy at a premium (above par), your YTM is lower. YTM is what matters for comparing bonds trading at different prices.
Why do Treasury prices move inversely to interest rates?
When prevailing interest rates rise, existing bond prices fall because investors can get better returns on newly issued bonds. Conversely, when rates fall, existing bond prices rise. This inverse relationship means that a bond purchased at par may trade at a premium or discount in the secondary market depending on rate movements since issuance. The longer the bond's maturity, the larger the price move for a given rate change. The Federal Reserve H.15 release shows historical rate trends.
Are Treasury securities taxed at the federal or state level?
Interest income from Treasury securities is subject to federal income tax but is exempt from state and local income taxes. This tax advantage makes Treasuries particularly valuable to residents of high-tax states. However, any gain on the sale of a Treasury security in the secondary market is taxed as a capital gain. The IRS and your state revenue authority are the official sources for tax treatment.
What is current yield and how does it differ from yield to maturity?
Current yield is the annual coupon payment divided by the current market price. It shows the annual return on your investment at today's price, but it does not account for any gain or loss at maturity. Yield to maturity is the more complete measure because it includes the capital gain or loss if held to maturity. For bonds purchased at par, current yield and YTM are the same.
Can I buy Treasury securities after they are issued?
Yes. You can buy newly issued Treasuries directly from TreasuryDirect.gov at auction, or you can buy previously issued Treasuries on the secondary market through a broker. Secondary market prices fluctuate based on interest rate movements and other factors. The Federal Reserve H.15 Selected Interest Rates publication shows recent auction results and secondary market yields.
Official sources
- TreasuryDirect: Treasury Bonds and Notes.
- Federal Reserve: H.15 Selected Interest Rates.
- IRS: Tax treatment of Treasury interest.
Reviewed by the CalculatorHub team, edited by James Graham, 13 June 2026. See our methodology. General information, not financial advice.