FAQs Concerning the Minimum for Marketable Issues
- What changes are being made in the way marketable Treasury securities are issued?
- Why is this change being made?
- How can Treasury securities be obtained?
- In what maturities are Treasuries available?
- How can marketable securities be converted to cash prior to maturity?
What changes are being made in the way marketable Treasury securities are issued?
Beginning with the auction of 13- and 26-week bills scheduled for April 7, 2008, all Treasury marketable securities - bills, notes, bonds and TIPS - will be sold and transferred in increments of $100, replacing the $1,000 minimum purchase and transfer amount that has been in effect since August 10, 1998. The new minimum and multiples will also apply to outstanding securities at the same time.
Why is this change being made?
The change is being made to make Treasury securities more accessible to a broader range of investors.
How can Treasury securities be obtained?
Treasury securities can be purchased on original issue directly from the Treasury after opening either an online TreasuryDirect account at www.treasurydirect.gov or a Legacy Treasury Direct account (submit a PD F 5182, New Account Request, available for downloading from www.treasurydirect.gov). Once an account has been set up, securities can be purchased through the account (TreasuryDirect) or by using Electronic Services to purchase by telephone or web (Legacy Treasury Direct). Also, a noncompetitive tender for available securities can be submitted prior to any auction for Legacy Treasury Direct.
Securities can also be purchased at original issue or in the secondary market through many government security brokers and dealers.
In what maturities are Treasuries available?
Treasury securities are currently available to the general public in maturities ranging from 4 weeks to 30 years. A list of the maturities the Treasury is currently offering can be found at www.treasurydirect.gov. Certain maturities (4-week bills, 20-year TIPS and 30-year bonds) are not available in Legacy Treasury Direct.
How can marketable securities be converted to cash prior to maturity?
Marketable securities can be sold in the secondary market, at current market prices, at any time prior to maturity. As a result, sellers of marketable securities can sustain a gain or loss depending on market conditions at the time of the sale. The Treasury charges a $45 fee to handle the sale in the secondary market of a marketable security* held in either its TreasuryDirect or Legacy Treasury Direct systems prior to maturity. Commercial brokers and dealers may charge a different fee for this service. If the security is held until maturity, the purchaser will receive their principal value at maturity.
* Note: 4-week bills held in TreasuryDirect cannot be sold prior to maturity due to the 45-day minimum holding period for securities held in this system.
