Every Treasury carries the same credit, so the choice between a 3-month bill and a 10-year note comes down to time: how long you lock in a rate, and how much its market value can swing while you wait. Short maturities protect the price and expose the income; long maturities do the reverse. This page compares them on yield, price risk, reinvestment risk and inflation, then runs 12-month returns for a 3-month bill, a 2-year note and a 10-year note if rates rise, hold or fall, with every assumption stated. The product details of bills, notes and bonds are in T-bills vs notes vs bonds, and the US Treasuries hub covers how to buy them.
How do short-term and long-term Treasuries compare?
Short-term Treasuries trade a lower yield for a stable price and fast repricing; long-term Treasuries pay more and lock in their rate, at the cost of large price swings. The table compares four points on the curve at October 30, 2026 yields.
| 13-week bill | 2-year note | 10-year note | 30-year bond | |
|---|---|---|---|---|
| Yield, October 30, 2026 | 4.08% investment rate | 4.56% | 4.94% | 5.31% |
| Extra yield over the 13-week bill | None | 0.48 point | 0.86 point | 1.23 points |
| Price change if yields rise 1 point at once | -0.26% | -1.87% | -7.46% | -13.39% |
| Modified duration | About 0.25 | 1.89 | 7.82 | 14.92 |
| Reinvestment risk | Highest: the whole amount reprices every 13 weeks | Low for two years | Only the coupons, for ten years | Only the coupons, for 30 years |
| Inflation exposure | Low: the rate resets as inflation shifts the Fed's path | Moderate | High: the coupon is fixed for a decade | Highest |
| Best match | Money needed within months | A known need in about two years | A known need around ten years away | Long-dated obligations |
The note and bond yields are par yields for new securities and the bill figure is its investment rate, so all four are on a comparable annual basis. Price changes are for a new security bought at par, from the formula worked through in why bond prices fall when rates rise.
How much more do long-term Treasuries pay?
Usually a little, and not always: on October 30, 2026 a 10-year note paid 0.86 point more than a 13-week bill, but throughout 2023 it paid less. That extra yield, the term spread, is what an investor earns for accepting price risk.
The spread reflects expected Fed policy and the term premium. When markets expect rate cuts, long yields can fall below short ones, as they did from late 2022 to late 2024, the inversion examined in the inverted yield curve explained. When investors want more pay for locking money up, the spread widens even if expected policy is unchanged. In late October 2026, 0.86 point a year on a 10-year note is the compensation for a price that can fall 7.46% on a 1-point rise. Current yields at every maturity are on the Treasury yield curve page and current bill yields on today's T-bill rates.
What would each return over 12 months if rates rise, hold or fall?
If yields rise 1 point, rolled bills win; if yields hold, the 10-year note earns slightly more; if yields fall 1 point, the 10-year note wins by a wide margin. The table shows total returns over 12 months on $10,000 invested on October 30, 2026.
| Yields over the next 12 months | 3-month bills, rolled for a year | 2-year note | 10-year note |
|---|---|---|---|
| Rise 1 point | 4.94% ($494) | 3.66% ($366) | -1.89% (-$189) |
| No change | 4.14% ($414) | 4.61% ($461) | 4.99% ($499) |
| Fall 1 point | 3.34% ($334) | 5.57% ($557) | 12.50% ($1,250) |
The assumptions behind the numbers:
- Starting yields. The bill is the 13-week bill at its October 30, 2026 discount rate of 3.99%; the notes are new issues bought at par at par yields of 4.56% and 4.94%.
- The rate move. Yields at every maturity shift by the stated amount immediately after purchase and stay there for 12 months.
- The bill. The first 13-week bill earns today's rate; the next three are bought at the shifted rate, each paying 1 ÷ (1 − discount rate × 91 ÷ 360) − 1 per quarter.
- The notes. After 12 months, each note is priced at its original yield plus the shift; the first coupon is reinvested for six months at the 26-week bill's 4.25% yield plus the shift.
- No roll-down, taxes or costs. If instead the curve keeps its current shape, a note's yield falls as it ages toward shorter, lower-yielding maturities, which adds return: 4.80% for the 2-year and 5.33% for the 10-year with no change in yields, and -1.58% for the 10-year after a 1-point rise.
The pattern is the point, not the decimals. A rolled bill's return moves with rates, but modestly, because each new bill picks up the new rate; a note's return moves against rates, sharply for the 10-year because its price change outweighs a year of interest. A 2-point move magnifies everything: on the same assumptions, the 10-year note returns -8.21% after a 2-point rise and 20.68% after a 2-point fall, against 5.75% and 2.56% for rolled bills.
How far can rates move before a long Treasury loses?
Not far for the 10-year note: it trails rolled bills over 12 months once yields rise about 0.11 point and loses money above about 0.72 point. The break-evens below use the same assumptions as the scenario table.
Worked example: Break-even rate moves over 12 months, from October 30, 2026 yields
- 10-year note vs bills: a rise of about 0.11 point leaves both near 4.2%; above that, rolled bills earn more.
- 10-year note vs zero: a rise of about 0.72 point wipes out a year of the 4.94% coupon; above that, the 12-month return is negative.
- 2-year note vs bills: a rise of about 0.27 point leaves both near 4.35%; above that, bills earn more.
- 2-year note vs zero: yields would have to rise about 5 points, because the price change on a note with one year left is small.
- The other direction: any fall in yields favors both notes over rolled bills, by about 9.2 points for the 10-year after a 1-point fall.
The asymmetry follows from duration. In the no-change case the 10-year note is ahead of rolled bills by about 0.85 point of return. A year from now it is a 9-year note with a modified duration of about 7.2, so each tenth of a point of yield rise costs it about 0.7% in price while adding only about 0.08% to what the bills earn, and the lead is gone after about 0.11 point. That is why long Treasuries fit money that can stay put for years better than money that might be needed on short notice.
What happened in recent years?
Both outcomes, a year apart: long Treasuries beat bills in the year after yields peaked in October 2023, and bills won the year after the Fed began cutting. The figures use Treasury's daily par yields, with bills rolled every 13 weeks at the 3-month par yield and notes bought at par and valued a year later at the yield for their remaining maturity.
| 12 months from | 3-month bill, rolled | 2-year note | 10-year note | What rates did |
|---|---|---|---|---|
| October 19, 2023 | About 5.6% | About 6.1% | About 12.1% | The 10-year yield fell from 4.98% to 4.08% |
| September 16, 2024 | About 4.6% | About 3.5% | About 1.2% | The Fed cut a full point and the 10-year yield rose from 3.63% to 4.04% |
The second row is the warning. An investor who bought a 10-year note in September 2024 expecting rate cuts to lift bond prices got the cuts and lost on price anyway, because the 10-year yield rose as the term premium climbed, from -0.28 to 0.56 point in the New York Fed's ACM model, as what moves Treasury yields explains. Meanwhile rolled bills kept paying above 4%: the curve was inverted at the start, with the 3-month yield at 4.96% against 3.63% for the 10-year, and later bills were bought at 4.34% to 4.43%.
How do inflation and reinvestment risk differ across the curve?
They mirror each other: long maturities lock in a nominal rate that inflation can erode, while short maturities track inflation but leave income exposed to rate cuts. Which risk is worse depends on whether inflation or falling rates turns out to be the bigger threat.
Inflation. A 10-year note bought at 4.94% fixes its coupon until 2036. On October 30, 2026, 10-year TIPS yielded 2.60% above inflation, which implies a breakeven of about 2.34% a year: if inflation averages more than that, TIPS would beat the regular note. Consumer prices rose 3.7% in the 12 months to September 2026, according to the Bureau of Labor Statistics. Bills offer a partial defense, because their yields tend to rise when inflation pushes the Fed to tighten, but only after a lag. TIPS explained covers the inflation-linked alternative.
Reinvestment. A bill holder's income resets every few weeks, which is an advantage when rates rise and a cost when they fall: in the scenario table, a 1-point fall cuts the rolled bill's 12-month return from 4.14% to 3.34%, and the lower income would last as long as rates stayed down, while the 10-year note keeps paying 4.94% on its face value until 2036. Are Treasuries risk free? shows how far bill income fell in 2008.
Which maturity fits which goal?
The maturity that matches when you will need the money removes most of the risk that matters for that goal. The rest is a choice about which leftover risk you would rather carry.
- Cash needed within a year. Bills, or a short T-bill ladder, keep the price risk near zero; the Treasury bill calculator shows what a given rate pays.
- A known expense in two to ten years. A note maturing near that date locks a yield and repays face value when the money is needed, whatever prices do in between.
- Income for many years. Long notes or bonds fix the income, accepting large price swings on paper and the risk that inflation runs above the coupon.
- Not sure. A ladder across several maturities spreads both risks, so some money reprices every year while the rest stays locked.
What are the risks of choosing by maturity?
The main risk is choosing a maturity on a rate forecast instead of a time horizon, since a miss of a fraction of a point can reverse the result.
- Price risk. Long Treasuries can lose a year's interest or more on a modest rise in yields, and a sale before maturity makes the loss real.
- Reinvestment risk. Short Treasuries can see income fall quickly when the Fed cuts, and the loss continues for as long as rates stay low.
- Inflation risk. A fixed coupon loses purchasing power whenever inflation runs above it, and the longer the maturity, the longer that exposure lasts.
- Model risk. The scenarios assume an instant, parallel move; real curves twist, so short and long yields can move by different amounts or in opposite directions.
- Behavior. Investors who buy long Treasuries for safety and then sell after a price drop take the loss that holding to maturity would have avoided.
All of these maturities carry the full faith and credit of the US government, so none of these risks concerns repayment. Scenario returns here are calculations from stated assumptions and dated yields, not forecasts.