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Treasury Floating Rate Notes: Resetting Interest and Reopened Issues

A Treasury floating rate note pays interest using a rate that changes with a short-term Treasury benchmark plus a fixed spread. That makes its payment pattern different from a fixed-rate note, even though both are Treasury debt. This guide explains the product and the auction concept of reopening an existing issue. It helps investors understand what resets, what remains fixed, and why a reopened security can have a different purchase price from an earlier sale.

Adapted from public-domain educational material published by U.S. Treasury. Fynoptic has organized and edited the material and added introductory and practical guidance. Sources were reviewed on October 28, 2026; original publication dates, where available, are listed below.

Floating Rate Notes

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

2-Year FRN See All 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".

FAQs about Floating Rate Notes

When did the U.S. Treasury begin issuing FRNs?

January 2014

What is the maturity term for Floating Rate Notes (FRNs)?

2 years.

What is the auction pattern for FRNs?

We auction FRNs each month, with original issues in January, April, July, and October, and reopenings in the other months.

What are reopenings, premiums, and accrued interest?

In a reopening, we auction additional amounts of a previously issued security. A reopened FRN has the same maturity date and spread as the original FRN, but a different issue date and usually a different price.

When you buy a reopened security, you pay a premium if the price of the security at reopening is greater than the face value of the security. The price of the reopened security is determined at auction. Because the security is being auctioned at different times, market conditions probably won't be the same and, therefore, the prices likely won't be the same either.

Also, when you buy a reopened security, regardless of its price, you may have to pay accrued interest--interest the security earns from the original dated date of the security until the date the security is issued to you. However, we pay the accrued interest back to you in your first interest payment.

How can I place a competitive bid for an FRN?

To place a competitive bid, you must use a broker, dealer, or financial institution. (TreasuryDirect allows only noncompetitive bids.)

FAQs about Unscheduled Reopenings

What is a reopening?

In a reopening, Treasury auctions an additional amount of an outstanding security. Treasury’s tentative auction schedule includes regularly scheduled reopenings.

What is an unscheduled reopening?

An unscheduled reopening is a reopening that results when Treasury conducts an auction of a new, non-indexed note or bond, and the coupon rate determined in the auction is the same as the coupon rate of an outstanding non-indexed note or bond with the same maturity date.

Treasury Inflation Protected Securities (TIPS) are only reopened as scheduled.

Can a note auction result in the unscheduled reopening of a bond?

Yes, a note auction can result in the unscheduled reopening of a bond.

How do Treasury auction results reflect an unscheduled reopening?

When a note auction results in the unscheduled reopening of a note (or a bond auction results in the unscheduled reopening of a bond), the Treasury auction results would identify the security term based on the security term in the auction announcement. The security issued would have the CUSIP, corpus CUSIP, and series of the reopened security. For example, see the announcement and results of a 5-year note auction that resulted in the unscheduled reopening of a 7-year note in February 2025.

When a note auction results in the unscheduled reopening of a bond, Treasury auction results would identify the security term and type based on the term and type in the auction announcement. For example, if a 10-year note auction resulted in an unscheduled reopening of a 30-year bond, the “Term and Type of Security” field in the auction results would remain “10-year note” as indicated in the auction announcement. However, the security issued would have the CUSIP, corpus CUSIP, and series of the 30-year bond.

When a note auction results in the unscheduled reopening of a bond, how would the additional amount of the security be reported on the Daily Treasury Statement (DTS) and the Monthly Statement of the Public Debt (MSPD)?

The additional amount of the security would be reported on the DTS and MSPD based on the reopened bond’s CUSIP, corpus CUSIP, and series. For example, if a 10-year note auction resulted in an unscheduled reopening of a 30-year bond, the additional amount issued would be reported as a bond on the DTS and MSPD.

Putting this into practice

Identify the index, spread, payment schedule, and maturity before comparing a floating rate note with a bill or fixed-rate bond. If buying a reopened issue, review price and accrued interest separately. The same security identifier does not imply that every buyer paid the same amount.

Sources and further reading

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