Floating Rate Notes (FRNs)

The U.S. Treasury began issuing Floating Rate Notes (FRNs) in January 2014. Issued for a term of two years, FRNs pay varying amounts of interest quarterly until maturity. Interest payments rise and fall based on discount rates in auctions of 13-week Treasury bills.

We offer FRNs in TreasuryDirect and through banks and brokers.  Once you purchase an FRN, you can hold it until it matures or sell it before it matures.

at a glance
Original Issue Spread: Determined at auction.
See spreads in recent auctions.
Minimum purchase: $100
Maximum Purchase
(in a single auction):
Non-competitive: $10 million
Competitive: 35% of offering amount
(See types of bidding in "Auctions in Depth")
Investment Increment: Multiples of $100
Issue Method: Electronic

Rates & Terms

  • The price of a FRN can be greater than, less than, or equal to the security's face value..
  • FRNs pay interest quarterly until maturity. At maturity, the face value of the FRN is paid to the owner.

Redemption Information

  • Minimum Term of Ownership: In TreasuryDirect, 45 days
  • Interest Earning Period: To maturity

Tax Considerations

  • Interest income is exempt from state and local income taxes.
  • Interest income is subject to Federal income tax.

Floating Rate Notes-Related FAQs

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