US National Debt Guide
Interest on the US National Debt: Daily Cost Tracker
Chris Kissell | Reviewed by Mitch Strohm | Updated: June 18, 2026
How Much Credit Do You Need?
Interest on the national debt now costs about $2.88 billion every day — roughly $1.05 trillion a year, more than the federal government spends on national defense. As of May 27, 2026, the weighted-average rate on Treasury debt is 3.34% and keeps rising as older low-rate bonds mature and are refinanced at today’s higher yields. This page tracks the daily and annual cost of servicing the $39.16 trillion national debt.
Key Takeaways
- Interest costs about $2.88 billion per day (~$33,287 per second) and is on track for roughly $1.05 trillion in FY2026 — more than the defense budget.
- The weighted-average rate on Treasury debt is 3.34% (April 2026), up from about 1.5% in 2021, and is still climbing as low-rate debt rolls over.
- Net interest has roughly tripled since FY2020 (~$345B) and is now among the largest federal line items; CBO projects it overtakes Medicare around 2027.
- That works out to about $3,167 per American per year just to service existing borrowing — see debt per person.
- Rising interest costs lift long-term Treasury yields, which anchor mortgage, auto, and the prime rate.
Table Of Contents
The Cost of Interest, by Year & by Security
Annual net interest on the debt has roughly tripled in five years as both the debt and interest rates climbed. The first table shows net interest outlays by fiscal year; the second shows the average rate the Treasury pays by security type.
| Fiscal Year | Net Interest | Note |
|---|---|---|
| FY2020 | ~$345B | Near-zero rates |
| FY2022 | ~$475B | Fed hikes begin |
| FY2023 | ~$659B | Rates peak |
| FY2024 | ~$882B | Surpasses defense |
| FY2025 | ~$1.00T | Crosses $1 trillion |
| FY2026 (run-rate) | ~$1.05T | ~$2.88B/day |
| Security Type | Avg Interest Rate |
|---|---|
| Treasury Bills (short-term) | 3.70% |
| Treasury Notes (2–10 yr) | 3.23% |
| Treasury Bonds (20–30 yr) | 3.40% |
| All interest-bearing debt | 3.34% |
Net interest = gross interest minus intragovernmental receipts (OMB/CBO basis). Average rates are from the U.S. Treasury (April 2026).
What Is the National Debt?
The national debt is the total amount of money the federal government has borrowed and not yet repaid. When the government spends more than it collects in taxes each year (a deficit), it borrows to cover the gap by issuing Treasury securities — bills (maturity under 1 year), notes (2–10 years), bonds (20–30 years), TIPS (inflation-protected), and savings bonds. Each year’s deficit adds to the cumulative debt. The Treasury’s guide to the national debt explains the full mechanics.
The debt is fundamentally different from household debt. A family borrows against future income and must repay in full. The government borrows against the full faith and credit of the United States and can roll over maturing securities indefinitely — it never needs to pay down the principal to zero. The real question is not whether the debt can be repaid but whether the interest on it can be serviced sustainably. When interest costs consume an ever-larger share of revenue, less money remains for defense, infrastructure, education, and social programs.
The debt is tracked in real time by the Treasury’s Debt to the Penny dataset, which reports the total public debt outstanding at the close of each business day. This is the source powering the live counter at the top of this page. The data goes back to April 1993, and the Treasury also maintains a Historical Debt Outstanding dataset reaching back to 1790.
Debt Breakdown: Public vs Intragovernmental
The national debt consists of two components, both reported daily by the Debt to the Penny dataset. Understanding the distinction matters because only debt held by the public affects financial markets and borrowing costs.
Debt held by the public ($31.36 trillion, 80.4%): Money borrowed from domestic investors (mutual funds, pension funds, banks, insurance companies, individuals), foreign governments and investors, and the Federal Reserve. These are marketable Treasury securities actively traded in the bond market. This portion drives Treasury yields and, indirectly, the prime rate and all consumer interest rates.
Intragovernmental holdings ($7.63 trillion, 19.6%): Money the government owes to its own trust funds — primarily the Social Security Old-Age and Survivors Insurance Trust Fund (~$2.7T), Medicare Hospital Insurance Trust Fund, military retirement funds, and federal employee pension funds. When these programs collect more in payroll taxes than they pay out, the surplus is invested in special non-marketable Treasury securities.
| Component | Amount | % of Total | YoY Change |
|---|---|---|---|
| Debt held by the public | $31,361,115,540,758 | 80.4% | +4.2% |
| Intragovernmental holdings | $7,629,274,126,731 | 19.6% | +1.8% |
| Total public debt outstanding | $39,163,302,863,182 | 100% | +3.8% |
National Debt by Year (2014–2025)
The debt has grown from $17.82 trillion at the end of fiscal year 2014 to $37.64 trillion by the end of FY 2025 — more than doubling in 11 years. The sharpest single-year increase was $4.23 trillion in FY 2020 (COVID pandemic response). For the complete record back to 1790, see our National Debt by Year page.
| Fiscal Year | Total Debt | $ Increase | % Change |
|---|---|---|---|
| FY 2025 | $37.64T | +$2.17T | +6.1% |
| FY 2024 | $35.46T | +$2.30T | +6.9% |
| FY 2023 | $33.17T | +$2.24T | +7.2% |
| FY 2022 | $30.93T | +$2.50T | +8.8% |
| FY 2021 | $28.43T | +$1.47T | +5.5% |
| FY 2020 (COVID) | $26.95T | +$4.23T | +18.6% |
| FY 2019 | $22.72T | +$1.20T | +5.6% |
| FY 2018 | $21.52T | +$1.27T | +6.3% |
| FY 2017 | $20.24T | +$672B | +3.4% |
| FY 2016 | $19.57T | +$1.42T | +7.8% |
| FY 2015 | $18.15T | +$327B | +1.8% |
| FY 2014 | $17.82T | +$1.09T | +6.5% |
Interest Rates on Treasury Securities
The government pays different interest rates depending on the type and maturity of Treasury security. Short-term bills carry rates closely tied to the federal funds rate, while long-term bonds reflect market expectations for future inflation and growth. The weighted average across all outstanding debt is approximately 3.36% as of February 2026.
| Security Type | Avg Rate | Typical Maturity |
|---|---|---|
| Treasury Bills | 3.720% | 4 weeks to 52 weeks |
| Treasury Notes | 3.190% | 2 to 10 years |
| Treasury Bonds | 3.377% | 20 to 30 years |
| TIPS (Inflation-Protected) | 0.990% | 5 to 30 years (real rate) |
| Floating Rate Notes (FRN) | 3.748% | 2 years (adjustable) |
| Total Marketable (weighted avg) | 3.355% | Blended across all maturities |
At a weighted average rate of 3.36% on ~$31 trillion in marketable debt, the government pays approximately $1.04 trillion in annual interest — roughly $2.74 billion per day or $114 million per hour. This makes interest the third-largest line item in the federal budget, behind only Social Security ($1.46T) and Medicare ($1.05T), and ahead of defense ($886B). For a deep dive into interest cost trends, see our Interest on the National Debt page.
Pro Tip: The raw debt number ($39 trillion) grabs headlines but the more meaningful metric is debt-to-GDP ratio (currently 123.1%). This ratio tells you whether the country can service its debt relative to its economic output. A growing economy can sustain higher nominal debt. When the ratio crosses 100%, it means the government owes more than the entire economy produces in a year. Compare this to other nations at our Debt-to-GDP Ratio page.
Who Holds the US Debt?
Of the $31.36 trillion in debt held by the public, domestic holders own approximately 70% and foreign entities hold about 30%. The Federal Reserve is the single largest holder at approximately $4.9 trillion. For the full interactive breakdown, see Who Owns US Debt.
| Holder | Holdings | % of Public Debt | Type |
|---|---|---|---|
| Federal Reserve | ~$4.9T | 15.6% | Domestic |
| US mutual funds & ETFs | ~$4.5T | 14.3% | Domestic |
| State & local governments | ~$1.6T | 5.1% | Domestic |
| Banks & depository institutions | ~$1.3T | 4.1% | Domestic |
| Japan | ~$1.1T | 3.5% | Foreign |
| China | ~$760B | 2.4% | Foreign |
| United Kingdom | ~$740B | 2.4% | Foreign |
| Other foreign holders | ~$6.7T | 21.4% | Foreign |
| Other domestic holders | ~$10.0T | 31.9% | Domestic |
A common misconception is that China “owns” a dangerous share of U.S. debt. In reality, China holds approximately 2.4% of publicly held debt and has been steadily reducing its Treasury holdings since 2013. Japan is the larger foreign holder. The dominant holders are domestic: American mutual funds, pension funds, insurance companies, banks, and the Federal Reserve together hold over 70% of publicly held debt.
What Is Driving the Debt Higher?
The debt has grown from $5.67 trillion in 2000 to $39 trillion today because annual spending consistently exceeds annual revenue. Four structural factors drive this imbalance, and none of them are temporary:
1. An aging population. The baby boom generation (born 1946–1964) is retiring at a rate of 10,000 people per day through 2030. Each retiree shifts from being a taxpayer to being a beneficiary of Social Security and Medicare, simultaneously reducing revenue and increasing mandatory spending. The 2025 Social Security Trustees Report projects the retirement trust fund will be depleted by 2033.
2. Rising healthcare costs. Medicare, Medicaid, and ACA subsidies collectively consume over 25% of federal spending. Healthcare costs grow faster than GDP because medical technology advances, drug prices increase, and an aging population requires more intensive care.
3. Compounding interest. Interest on the debt is now the fastest-growing federal expense. At $1 trillion annually, it exceeds the defense budget. Worse, interest payments generate new debt (the government borrows to pay interest), creating a feedback loop. Every 1% increase in the average interest rate adds approximately $310 billion in annual interest costs.
4. Insufficient tax revenue. Federal revenue averages about 17–18% of GDP while spending exceeds 23% of GDP. The gap persists regardless of which party controls Congress. For details, see our Federal Spending & Revenue page.
How the Debt Affects Your Borrowing Costs
The national debt and the prime rate (currently 6.75%) are connected through Federal Reserve policy. When the government borrows heavily, it floods the bond market with Treasury securities, pushing yields higher. Higher Treasury yields put upward pressure on mortgage rates (tied to the 10-year Treasury), while the Fed’s response to fiscal conditions affects the federal funds rate — and therefore the prime rate that controls credit card APRs, HELOCs, and SBA loan rates.
Since September 2024, the Fed has cut the federal funds rate five times (from 5.25%–5.50% to 3.50%–3.75%), bringing prime from 8.50% to 6.75%. This has lowered variable-rate borrowing costs — credit card APRs dropped from ~23% to ~21%, HELOCs declined by 1.75%, and new personal loan offers improved. However, 10-year Treasury yields have actually risen during this period because bond investors are pricing in persistent fiscal deficits.
Pro Tip: If you’re considering a major financial decision — refinancing a mortgage, taking an SBA loan, or consolidating credit card debt — watch both the Fed and the Treasury auction calendar. A surge in Treasury issuance can push yields higher and raise your borrowing costs even if the Fed holds or cuts rates. Use the Prime Rate Impact Calculator to model how rate changes affect your specific loan payments.
Frequently Asked Questions
What is the current US national debt?
As of May 27, 2026, the total U.S. national debt is $39,163,302,863,182 (approximately $39 trillion). This includes $31.36 trillion in debt held by the public and $7.63 trillion in intragovernmental holdings. The figure is updated daily by the Treasury Department’s Debt to the Penny dataset.
How much national debt per person?
With a U.S. population of approximately 331.5 million, each citizen’s share of the national debt is roughly $117,631. Per taxpayer (approximately 140 million individual returns filed annually per IRS data), the share rises to about $278,503. Per household (~130 million households), the share exceeds $300,000.
How fast is the national debt growing?
Based on the 30-day rolling average from Treasury data, the debt grows by approximately $6.0 billion per day, $492 million per hour, and $136,747 per second. This pace reflects annualized budget deficits exceeding $2 trillion.
What is the US debt-to-GDP ratio?
The current debt-to-GDP ratio is approximately 123.1%, meaning the government owes 1.33 times the entire annual economic output of the country. The U.S. crossed the 100% threshold in 2013. Among major economies, only Japan (230%) has a higher ratio.
Who owns the US national debt?
Of the $31.36 trillion held by the public, approximately 70% is held domestically (mutual funds, the Federal Reserve at ~$4.9T, pension funds, banks, individuals) and 30% by foreign entities. Japan (~$1.1T) and China (~$760B) are the largest foreign holders.
How does the national debt affect interest rates?
Heavy government borrowing pushes Treasury yields higher, which raises mortgage rates (tied to the 10-year Treasury) and puts upward pressure on all borrowing costs. The prime rate (6.75%) is set by the Fed in response to economic conditions that include fiscal policy. When debt grows faster than GDP, yields tend to rise even if the Fed cuts short-term rates.
Sources & References
- U.S. Treasury — Debt to the Penny (Daily) — Primary source for total public debt
- U.S. Treasury — Understanding the National Debt — Educational overview
- U.S. Treasury — Historical Debt Outstanding — Debt data from 1790
- U.S. Treasury — Average Interest Rates on Treasury Securities — Monthly rate data
- Congressional Budget Office — Budget Projections — Deficit and debt forecasts
- Federal Reserve — H.4.1 Factors Affecting Reserve Balances — Fed holdings data
- FRED — Federal Debt: Total Public Debt — Quarterly debt series
- FRED — Debt as Percent of GDP — Debt-to-GDP ratio series
- SSA — 2025 Social Security Trustees Report — Trust fund projections
- U.S. Census Bureau — Population Estimates — Population data for per-citizen calculations
Keep Reading
- Current National Debt Today — Live total with 30-day trend
- Debt Per Person Calculator — Your family’s share of the debt
- Debt-to-GDP Ratio — How the US compares globally
- National Debt by Year — Complete history from 1790
- Interest on the National Debt — $1T+ per year and growing
- Current Prime Rate — How Fed policy connects to the debt
- Fed Meeting Schedule 2026 — FOMC dates affecting monetary policy
Financial Disclaimer
This article is for informational purposes only and should not be construed as financial advice. All debt figures are sourced from U.S. Treasury Fiscal Data (Debt to the Penny dataset) and are subject to daily revision. Interest rate data is from the Average Interest Rates on Treasury Securities dataset. GDP data is from the Bureau of Economic Analysis. Population estimates are from the U.S. Census Bureau. Debt holder estimates are approximate and based on the most recent Treasury International Capital data and Federal Reserve H.4.1 release. Past trends do not guarantee future results. Individuals should consult with qualified financial advisors before making significant financial decisions. The author and PrimeRates.com disclaim any liability for financial decisions made based on information presented in this article.