How to Build a Treasury Direct Bond Ladder

Laddering investments involves purchasing a number of the same investment with different maturity dates. This ensures that every month, three months, year, or any other interval you predetermine, one of the investments will mature. You can then decide whether to cash in the investment or reinvest it. Rather than having all your money tied up in an investment long term, laddering allows you more liquidity and investment choice. Purchasing bonds through the U.S. government’s Treasury Direct program is one way to build a bond ladder.

Open an account at Treasury Direct. Log onto the Treasury Direct website and complete the online application. You’ll need to link your Treasury Direct account to an existing bank account. Treasury Direct will withdraw the money to pay for your bond purchases from this bank account and deposit the proceeds when bonds mature into this account. You’ll set up an individual password for the account.

Log in to your account at Treasury Direct and click the "Buy Direct" tab at the top of the page, then select "Bonds." Choose the bond you want to buy. Treasury bonds have a maturity date 30 years in the future, so building a ladder with these bonds requires planning into the future. Bonds are sold at auction once a month, according to the schedule posted on the Treasury Direct website. The bonds are sold at a discount and pay full value at maturity. When purchasing a bond through Treasury Direct, you agree to pay the discount price offered on the day of the auction. This is known as a non-competitive bid.

Watch your bank account. On the day of the bond auction, the discounted price for the bond will be deducted from your account. Log in to your Treasury Direct account and you will see the bond credited to your account. You will not receive an actual paper bond.

Buy a second bond the next month, quarter, year, or whatever interval you determine for your ladder. Repeat this step until your ladder is as “tall” as you like – extending as far into the future as you would like.

Cash in or roll over the original Treasury bond in 30 years when it matures. Once the first one matures, you will have other bonds maturing at the interval you set up when you built your ladder.


  • Instead of long-maturing Treasury bonds, you may wish to buy Treasury notes for your ladder. Treasury notes have maturity dates ranging from four weeks to five years. Buying notes instead of bonds allows you to build your ladder much faster and to realize gains much sooner.