Are Treasury Bonds a Good Investment in 2025?

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If you’re wondering, are Treasury bonds a good investment right now? The answer is yes, but it depends on your goals. Treasuries are one of the safest ways to earn a steady income, which makes them especially appealing in volatile markets or as you near retirement.

According to the U.S. Department of the Treasury, as of July 2025, the 10-year Treasury yield is about 4.3% and the 30-year yield is 4.8%. That’s higher than in recent years, making them more attractive for conservative investors.

But before you decide whether they fit your portfolio, it’s important to weigh their safety, risks and role in your financial plan.

What Are Treasury Bonds?

Treasury bonds, or T-bonds, are long-term government securities. When you buy one, you’re essentially lending money to the U.S. government in exchange for interest payments every six months. At maturity, typically 20 or 30 years, you get your principal back.

Key Features Include:

• Maturity: 20 to 30 years
• Coupon payments: Fixed interest paid twice per year
• Government backing: Considered default-proof since they’re backed by the U.S. Treasury

Why Investors Like Treasury Bonds

Treasuries are popular because they offer safety and predictability that other investments don’t always provide.

• Safety and credit quality: The U.S. government has never defaulted on its debt, which is why Treasuries are often called “risk-free.”
• Steady income with tax perks: You’ll get fixed interest payments every six months, and those payments are exempt from state and local taxes (IRS).
• Portfolio stability: Historically, Treasuries have held their value during stock market downturns, making them a useful hedge.

For example, Federal Reserve Data shows that during the 2008 financial crisis, long-term Treasury bonds returned more than 20%, even as stocks plunged.

Risks and Drawbacks of Treasury Bonds

No investment is perfect. Even Treasuries come with trade-offs:

• Interest rate risk: When interest rates rise, bond prices fall. Long-term bonds are especially sensitive to rate changes.
• Inflation erosion: If inflation runs higher than bond yields, your real return shrinks. For instance, with inflation at 3% and a 10-year yield of 4.3%, your true return is closer to 1.3%.
• Reinvestment risk: When your bonds or coupons mature, you may have to reinvest at lower rates.

According to a 2023 survey by the Investment Company Institute, 59% of U.S. households held bonds or bond funds, showing just how widely used they are despite these risks.

Treasury Bond Yields in 2025

Here’s how Treasuries stack up against other safe investments right now:

According to the Federal Reserve Bank of St. Louis, inflation has averaged around 2 to 3% in recent years, meaning Treasuries are offering modest but positive real returns.

How to Use Treasury Bonds in Retirement Planning

Treasuries can be especially useful when planning for retirement.

• Bond ladders: Staggering maturities can provide consistent income while reducing interest rate risk.
• 60/40 portfolios: The classic mix of 60% stocks and 40% bonds balances growth with stability.
• Age-based strategies: FINRA suggests gradually increasing bond exposure as you age. By your 70s or 80s, 50 to 70% of your portfolio in bonds may help preserve income and reduce risk.

When Treasury Bonds May Not Be Ideal

Treasuries aren’t always the right choice. Here are a few situations where they may fall short:

• High inflation periods: Rising prices can outpace yields, reducing real returns.
• Growth-focused investors: Stocks or equity funds typically provide higher long-term gains.
• Liquidity needs: Treasury bonds tie up money for 20 to 30 years. Shorter-term T-bills or T-notes may be better if you need access to cash.

How to Buy Treasury Bonds

You have two main options:

1. TreasuryDirect.gov

• Open a free account.
• Link your bank account.
• Choose bond type and maturity.
• Buy at auction.

2. Brokerages

• Log into your account.
• Search Treasury bonds.
• Buy in $1,000 increments through the auction or secondary market.

The U.S. Treasury reports that it issued more than $2 trillion in marketable securities in 2024, much of it in Treasury securities — demonstrating the importance of these instruments to government financing and investor demand.

Advanced Options

• TIPS (Treasury Inflation-Protected Securities): Adjust with inflation and protect purchasing power.
• Treasury ETFs and mutual funds: Provide diversification without buying individual bonds.
• Structured ladders and rollovers: Help you manage reinvestment and maintain a steady income.

Final Take to GO

So, are Treasury bonds a good investment? If your priority is safety, income stability and portfolio balance, the answer is yes. They’re not designed for high growth, but they provide peace of mind — especially in uncertain markets or retirement.

Pairing Treasuries with other investments like CDs, TIPS or dividend stocks can give you the best of both worlds: safety and growth.

Next, explore our guides on the best CD rates available and retirement planning strategies to see how Treasuries fit into your bigger financial picture.

Information is accurate as of Aug. 18, 2025.

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