What's Inside?
Let’s be real: Buying treasury bonds on Fidelity is not as hard as some people make it sound. I’ve purchased T-bills, T-notes, and even TIPS through my Fidelity account, and after a few clumsy attempts early on, I figured out a workflow that takes me about five minutes per transaction. In this guide, I’ll walk you through every step, highlight the traps most people fall into, and answer the questions I see investors ask over and over.
Why Buy Treasury Bonds on Fidelity?
Treasury bonds are one of the safest investments you can own. Backed by the U.S. government, they offer predictable interest payments and a guaranteed return of principal if held to maturity. Fidelity makes the buying process straightforward, with no commission on most transactions and a user-friendly interface that lets you compare yields instantly.
I remember my first Treasury purchase on Fidelity—I spent an entire afternoon clicking around, worried I’d mess up the order. A few years later, I can buy a 10-year note in about five minutes flat. The platform isn’t perfect, but it’s far less intimidating than people assume. In fact, Fidelity is one of the few brokerages that offers direct access to Treasury auctions and a robust secondary market for T-bills, T-notes, T-bonds, TIPS, and FRNs.
What Do I Need to Buy Treasury Bonds on Fidelity?
You need three things before you place your first Treasury order:
- A funded Fidelity brokerage account (individual, joint, IRA, or even a 401(k) rollover account).
- An understanding of the bond types you’re interested in: Treasury bills (T-bills) mature in a year or less, notes mature in 2–10 years, bonds mature in 20–30 years, TIPS protect against inflation, and FRNs have floating rates.
- A rough idea of your target maturity and yield. There’s no point in buying a 30-year bond if you’ll need the cash in five years.
One thing that surprises beginners: the minimum investment is just $100 for T-bills. You don’t need thousands to start building a ladder. Fidelity will show you the minimums clearly on each bond’s detail page. But here’s the kicker—just because the minimum is low doesn’t mean you should ignore the bid-ask spread in the secondary market. It’s often wider for smaller lots, so watch out.
How to Buy Treasury Bonds on Fidelity
Let’s get into the actual process. I’m using the current Fidelity website layout, but the steps are similar across versions and the mobile app.
Step 1: Access the Fixed Income Page
Log in to your Fidelity account. Before you start, I recommend checking the official auction schedule on TreasuryDirect.gov. In the top navigation bar, hover over “Trade” and select “Fixed Income.” Alternatively, type “fixed income” in the search box and click the first result. You’ll land on the Fixed Income landing page, which shows featured bonds and a ticker that lists upcoming auctions.
Step 2: Choose Treasury Bonds
On the Fixed Income page, click “Bonds” in the left sidebar, then select “Treasury” from the dropdown. You’ll see two main tabs: “Auction” for new issues and “Secondary” for existing bonds. If you’re buying at auction, the tab will list upcoming auctions for T-bills, notes, bonds, and TIPS. Click the type you want, then choose the specific issue you’re interested in.
For secondary market trades, you’ll get a searchable table with hundreds of bonds, maturity dates, coupons, and yields. Fidelity lets you sort by maturity or yield, which is handy when you’re laddering.
Step 3: Place Your Order
Click a bond to view its detail page. You’ll see the bid/ask price, yield to maturity, and all the key dates. Enter the quantity (in multiples of the minimum, usually $100 or $1,000 face value). Choose whether you want a market order or a limit order. I recommend starting with a limit order to avoid surprises, especially in a volatile market.
Next, set the settlement date (usually the next business day for secondary trades) and choose if you want to reinvest the interest or have it paid in cash. Fidelity also offers an auto-roll option for T-bills and notes—this automatically reinvests your principal when the bond matures. It’s a fantastic tool for ladder builders, but be aware: it only works if you’re buying new issues at auction. I’ll explain more in the FAQ.
Step 4: Confirm and Manage
Review the order preview carefully. Double-check the face value, price, accrued interest, and total amount. If it all looks good, click “Place Order.” You’ll get a confirmation number, and the bond will appear in your “Fixed Income” positions within a couple of days.
After that, don’t forget to track your bond’s maturity date. Fidelity sends reminders, but I like to set my own calendar alerts as well. You can also use Fidelity’s “Bond Ladder” tool to visualize your upcoming maturities, which is a feature I never use enough.
What Fees Does Fidelity Charge for Treasury Bonds?
Here’s where a lot of people get confused. Fidelity does not charge a commission for online Treasury trades—whether you buy at auction or in the secondary market. That’s been true for years, and it’s a big selling point for the platform. However, “no commission” doesn’t mean “no cost.”
In the secondary market, you pay the spread between the bid and ask price. The spread is built into the price you see, not a separate fee. For smaller trades, the spread can be a few basis points, which is tiny but still worth knowing. At auction, you pay the issue price, which is typically at or near par. There’s no spread, since you’re buying directly from the government.
One hidden cost that surprises people: accrued interest. When you buy a bond between coupon payments, you pay the seller the interest that has accrued since the last coupon date. You get this back at the next coupon payment, but it affects your initial cash outlay. On Fidelity’s order screen, you’ll see “Accrued Interest” listed separately, so there’s no mystery.
Another point: if you hold a bond to maturity, you get your principal back. If you sell before maturity, you might get more or less than what you paid, depending on interest rates. Fidelity provides a “YTM” (yield to maturity) figure that tells you your effective return if you hold until maturity. That’s the number to watch, not the coupon rate.
| Aspect | Auction | Secondary |
|---|---|---|
| Commission | None | None |
| Spread | N/A (direct from government) | Bid-ask spread built into price |
| Minimum | $100 (T-bills) / $1,000 (notes/bonds) | Same as auction |
| Settlement | Auction date | Next business day |
| Auto-roll | Yes, for new issues | No |
What Mistakes Should You Avoid When Buying Treasury Bonds on Fidelity?
Over the years, I’ve watched friends make the same mistakes. Let’s run through the ones that matter most.
Mistake #1: Buying a bond with a longer maturity than you planned just because the yield is higher. Yield is compensation for duration risk. A 30-year bond’s yield might look tempting, but if rates rise, its price will drop like a stone. If you sell early, you could lose money.
Mistake #2: Ignoring the yield to maturity. A bond with a 4% coupon might have a YTM of 3.2% if it’s trading at a premium. Always compare YTMs, not coupon rates. Fidelity displays both, but beginners often glance at the coupon and think they’re getting more than they actually are.
Mistake #3: Overlooking the accrued interest and buying right before a coupon payment. You don’t gain anything by doing this, because you pay the accrued interest upfront and get it back a couple of weeks later. It doesn’t hurt, but it ties up cash and adds bookkeeping complexity.
Mistake #4: Using secondary market orders without checking the bid-ask spread. For large institutions, the spread is negligible. For small retail lots, it can be wider. You can see the spread on Fidelity’s detail page—if it looks too wide, shop around.
Mistake #5: Assuming Treasury bonds are 100% risk-free. They are free of credit risk, but not market risk. If you sell before maturity, you may lose money. The longer the duration, the higher the volatility. A 2-year T-note is very safe in price terms; a 30-year T-bond is anything but stable.
Mistake #6: Not setting up auto-roll when you intend to reinvest. Without it, your principal sits in cash after maturity. Fidelity’s auto-roll feature handles this seamlessly. But be warned: auto-roll only applies to new issues bought at auction, not secondary-market purchases.
