U.S. and European Treasury Bonds via Freedom24: A Guide for Portuguese Investors

Treasury bonds have gained popularity in recent years because, unlike stocks, they offer more predictable returns and lower risk — these are debts issued directly by the governments of the U.S. (Treasury) or European countries to finance themselves. For those looking to diversify a portfolio mainly composed of stocks and ETFs, it makes sense to understand how to access this market through Freedom24.

Two Ways to Invest in Treasury Bonds

Freedom24 provides direct access to more than 147,000 bonds — governmental, corporate, in euros or dollars — in the primary market (issuance auctions) and the secondary market. To start directly, Freedom24’s “Bonds Showcase” product allows for investment starting at 1,000€ or 1,000$ per bond.

There is also a second route, often more practical for those who do not want to choose individual bonds: Treasury bond ETFs (e.g., UCITS ETFs focused on short- or long-term U.S. public debt), which replicate a diversified basket of bonds and can be purchased for much lower amounts, with the liquidity and simplicity of a regular ETF.

Why Many European Investors Prefer UCITS ETFs Over Direct U.S. Bonds

It’s worth noting that, since the implementation of the European PRIIPs regulation, many financial products originating outside the EU — including certain bonds and ETFs domiciled in the U.S. — require a Key Information Document (KID) compliant with European rules before they can be sold to retail investors in the EU. In practice, this means that direct access to certain U.S. bonds may be limited or involve more formalities, while UCITS ETFs (domiciled in Ireland or another EU country but replicating the same type of exposure, like U.S. Treasury) are precisely designed to comply with these rules and be available without restrictions to European retail investors. Therefore, for many Portuguese investors, the simplest path to gain exposure to the U.S. Treasury ends up being a UCITS ETF rather than an individual bond directly.

Fees

The cost structure for bonds at Freedom24 (Smart plan) is:

• 0.15% commission on the transaction value, with a minimum of 5€ or 5$ per purchase or sale;
• free custody — no annual costs for holding bonds in the portfolio.

In a purchase of 1,000€, for example, this typically means paying the minimum of 5€ (since 0.15% of 1,000€ would be 1.50€, below the applicable minimum).

Risk: Bonds are not “Risk-Free”

Treasury bonds from countries with good credit ratings (like the U.S. or most eurozone countries) have very low default risk, but they are not risk-free:

• Interest rate risk — if market rates rise after your purchase, the market value of your bond may fall (you only receive the nominal value if you wait until maturity);
• Currency risk — bonds in dollars expose you to EUR/USD fluctuations, which can amplify or reduce the return in euros;
• Liquidity risk — some bonds in the secondary market have less trading than popular stocks, which can widen the bid/ask spread.

How to Declare Interest on the IRS

The interest (coupons) received from bonds is capital income (category E) and, like the interest from the D-Account, it is declared in Annex J of the IRS, with the same choice between a 28% withholding tax or aggregation. If you sell a bond before maturity with a capital gain relative to the purchase price, this is treated as a capital gain, with the same rules (including the holding period discount) that apply to stocks and ETFs.

Before investing, always confirm the security and regulation of the brokerage in our article Is Freedom24 Safe?.

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Educational content, not tax or investment advice. Fees and available products may change — always confirm the current values at Freedom24. Investing involves risk, including capital loss.

Educational content, not financial or tax advice. Always confirm current conditions on the platform before investing.