Interest on the national debt, explained

Drafted with AI assistance from official sources; checked against the sources listed below.

It depends which official number is used, and the gap between them is large. Treasury's own gross figure counts all interest on all its debt, including interest it credits to federal trust funds. The budget's net interest counts only what flows out of the government, less interest it receives. 500metrics leads with the gross figure, names it every time, and shows the other measures beside it.

The three measures

The difference between the first and the third is mostly interest on intragovernmental holdings: Treasury credits the Social Security, Medicare, military and civil service retirement trust funds with interest on the special securities they own. That interest is real for the trust funds, but for the government as a whole it is one account paying another, so the budget nets it out.

How much is that per day?

Gross interest expense for fiscal year 2026 through August was $1,267.8 billion. The fiscal year started on 1 October 2025, so the 11 months to 31 August cover 335 days, an average of about $3.78 billion a day (our arithmetic). In August alone it was $97.769 billion. A per-day figure from net interest would be lower, so a "per day" number depends on which measure it divides.

Who receives the interest

• Investors in marketable debt: US households, banks, pension funds, insurance companies, investment funds, state and local governments, and foreign investors and central banks. Treasury pays them in cash.
• The Federal Reserve, on the Treasury securities it owns. When the Fed makes a profit after its own costs it sends it to Treasury, so part of this interest returns. After a loss it sends nothing until the loss is made up.
• Federal trust funds, on intragovernmental holdings. This interest is credited as more securities, not paid out in cash.

Why the bill grows

Two things drive it: how much debt there is, and the interest rates on it. At 31 August 2026 the average interest rate on marketable Treasury debt was 3.475%. As older, lower-rate securities mature and are replaced at current auction yields, that average moves toward those yields. The maturity wall guide explains how much debt is repriced each year.

Fiscal years

Federal fiscal years run from 1 October to 30 September and are named for the year they end in: fiscal year 2026 ended on 30 September 2026. Its full-year gross figure arrives with September's monthly data, published on the fourth business day of October. Comparing a fiscal year with a calendar year mixes two different 12-month windows; 500metrics compares fiscal years with fiscal years and the same months with the same months.

What these numbers cannot tell you

• Cash paid in a month. Gross interest expense is accrued; payments on coupons happen twice a year per security, and bill interest is paid at maturity.
• Interest cost in the future. That depends on rates not yet set; the refinancing page shows a scenario, labelled as one.
• How interest compares with other spending, unless both numbers cover the same months on the same basis.