Treasury Note (T-Note)
A medium-term U.S. government security with maturities of 2 to 10 years, paying semiannual fixed interest coupons.
What is Treasury Note?
A Treasury note (T-note) is a marketable U.S. government debt security with maturities ranging from 2 to 10 years, issued in denominations as low as $100. T-notes pay a fixed coupon rate semiannually and return the face value at maturity. The U.S. Treasury auctions notes at the 2-, 3-, 5-, 7-, and 10-year tenors on a regular schedule. The 10-year Treasury note yield is the most widely watched benchmark interest rate in global finance, influencing mortgage rates, corporate borrowing costs, and asset valuations worldwide. T-notes occupy the intermediate range of the Treasury yield curve between short-term T-bills and long-term T-bonds.
Example
The U.S. Treasury auctioned $42 billion in 10-year Treasury notes in November 2024 at a high yield of 4.347%. An investor who purchased $10,000 face value receives $217.35 in semiannual coupon payments (4.347% × $10,000 / 2) every six months for 10 years, plus the $10,000 principal at maturity in 2034. The 10-year yield from this auction is used immediately as the reference rate for pricing corporate bonds and mortgages.