Skip Navigation

Floating Rate Notes (FRNs)

Floating Rate Notes (FRNs) are relatively short-term investments that:

  • mature in two years
  • pay interest four times each year
  • have an interest rate that may change or "float" over time

You can hold an FRN until it matures or sell it before it matures.

FRNs at a Glance

Issued in Electronic form only
Matures in Two years
Interest rate The rate varies. See How we calculate the floating interest rate further down this page.
Interest paid Every three months until maturity
Minimum purchase $100
In increments of $100
Max. purchase amount $10 million (non-competitive bid)
35% of offering amount (competitive bid)
(See Buying a Treasury marketable security for information on types of bids.)
Auction dates Original issue: Jan., April, July, Oct.
Reopenings: All other months
See the Auction Calendar for specific dates.
Taxes Federal tax due each year on interest earned. No state or local taxes
Eligible for STRIPS? No

Latest Rates

How we calculate the floating interest rate

The interest rate of an FRN is the sum of two components: an index rate and a spread.

  • Index rate. This rate is tied to the highest accepted discount rate of the most recent 13-week Treasury bill. We auction the 13-week Treasury bill every week, so the index rate of an FRN is reset every week.
  • Spread. The spread is a rate we apply to the index rate. The spread stays the same for the life of an FRN. The spread is determined at the auction when the FRN is first offered. The spread is the highest accepted discount margin in that auction.

The index rate plus the spread equals the interest rate.

We apply the interest rate to an FRN's par value every day. Thus, the FRN accumulates interest earned every day.

You can see the index rates and spread for current FRNs. Also, see "How to use the FRN daily indexes database".

We're Here to Help

We welcome your questions and comments.

Write Us

If you write to us and want a response, please put your address in your letter (not just on the envelope).

Department of the Treasury
Bureau of the Fiscal Service
Attention: Auctions
3201 Pennsy Drive, Building E
Landover, MD 20785

Call Us

For general inquiries, please call us at 844-284-2676 (toll free)

E-mail Us