Ten Year Treasury Yield
What the 10-year Treasury yield means, how it changes a note's price, how Treasury interest is taxed, and a calculator.
Ten year treasury yield price and tax calculator
What the ten year treasury yield is
The 10-year Treasury yield is the return the market demands to lend to the US government for 10 years. It's set by trading in 10-year Treasury notes and moves every day. Mortgage rates, corporate borrowing costs and stock valuations all key off it, which is why it's watched so closely. The current rate is on the Treasury's daily yield curve page.
How yield and price move
A 10-year note pays a fixed coupon every six months. When market yields rise above the coupon, the note's price falls below $100 per $100 of face value; when yields fall, the price rises. The coupon is set at auction, so a new note sells close to par. You can buy notes at auction in TreasuryDirect from $100, in $100 increments, up to $10 million in a non-competitive bid, or through a broker.
Taxes: federal yes, state no
Treasury interest is taxed federally (it appears in Box 3 of Form 1099-INT) but is exempt from state and local income tax, so in a high-tax state a Treasury can beat a CD paying a higher rate. Shorter-term options: Treasury T bills.
Common questions
What is the ten year treasury yield?
The market interest rate on 10-year US Treasury notes, which changes daily.
Why do bond prices fall when yields rise?
A fixed coupon is worth less when new notes pay more, so the price drops.
Is Treasury note interest taxed by states?
No, it's federally taxable but exempt from state and local income tax.
Sources
More savings and interest calculators: PA529 · ScholarShare 529 · Virginia529
Related
General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.