TreasuryDirect vs Treasury ETF
**TreasuryDirect** lets you buy bills, notes, and bonds at auction with no fund fee—holds are less liquid before maturity. **Treasury ETFs** (SHV, BIL, SGOV) trade instantly in brokerage accounts with tiny expense ratios and simple 1099s.
Step by step
1. Match your timeline
Ladder T-bills on Direct; use ETFs for cash sweep flexibility.
2. Compare after-tax yield
State tax exemption applies to both; fund fees matter on ETFs.
3. Plan liquidity
Selling ETF before maturity vs holding bill to maturity on Direct.
TreasuryDirect vs ETF
Many investors use ETFs for operating cash and Direct for known maturity dates.
- TreasuryDirect: No ongoing fee; auction access; clunkier UI.
- Treasury ETF: Instant trade; expense ratio; market price noise.
Use our calculators
Common mistakes
- Ignoring ETF yield vs SEC yield
- Buying ETF at premium to NAV
FAQ
Are Treasuries state-tax free?
Interest is exempt from state tax; federal still applies.