What is Price Discount/Premium of US Treasury Note/Bond?

Price Discount/Premium of US Treasury Note/Bond (T-Note/T-Bond) is the difference between your purchase price and its face value, also called par value.

If your purchase price is lower than the face value, you are getting a price discount on your purchase. This happens when the coupon rate of the T-Note/T-Bond is lower than the current interest rate on the market.

If your purchase price is higher than the face value, you are paying a price premium on your purchase. This happens when the coupon rate of the T-Note/T-Bond is higher than the current interest rate on the market.

To calculate the price discount, you can simply subtract the purchase price from the face value of the T-Note/T-Bond:

Discount = (Face value) - (Purchase Price)

Here is an example of 10-year T-Note with a price discount of $210.82:

Here is an example of price discount showing on a 10-year T-Note auction result:

Release Date: November 05, 2024 (the auction date)
Term and Type of Security: 10-Year Note
CUSIP Number: 91282CLW9
Series: F-2034

Interest Rate: 4-1/4%
High Yield: 4.347% (the highest accepted YTM)
Price: 99.220075 (the lowest accepted price)
Accrued Interest per $1,000: None 

Median Yield: 4.290% (50% accepted at or blow this YTM)
Low Yield: 4.200% (5% accepted at or blow this YTM)

Issue Date: November 15, 2024 (the settlement date)
Maturity Date: November 15, 2034

If you bought this T-Note with the high yield, you are getting a price discount of 100.00 - 99.220075 = 0.77992500000001 = $0.78 per $100 face value.

Here is an example of price premium showing on a 10-year T-Note auction result:

Release Date: December 11, 2024 (the 1st reopening auction date)
Term and Type of Security: 9-Year 11-Month Note
CUSIP Number: 91282CLW9
Series: F-2034

Interest Rate: 4-1/4%
High Yield: 4.235% (the highest accepted YTM)
Price: 100.114150 (the lowest accepted price)
Accrued Interest per $1,000: $3.63950 

Median Yield: 4.190% (50% accepted at or blow this YTM)
Low Yield: 4.080% (5% accepted at or blow this YTM)

Issue Date: December 16, 2024 (the settlement date)
Maturity Date: November 15, 2034
Original Issue Date: November 15, 2024
Dated Date: November 15, 2024 

If you bought this T-Note with the high yield, you are paying a price premium of 100.114150 - 100.0 = 0.114150 = $0.11 per $100 face value.

⇒ YTM (Yield To Maturity) on US Treasury Note/Bond

⇐ Performance Measurements of US Treasury Note/Bond

⇑ Performance Measurements of US Treasury Note/Bond

⇑⇑ US Treasury Securities