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An auction is how the U.S. Treasury sells Treasury bills, Treasury notes, Treasury bonds, andTreasury Inflation-Protected Securities (TIPS). Competitive bids submitted in an auction determine a security’s interest rate or discount rate, and price. However, investors who buy securities through TreasuryDirect or Legacy Treasury Direct don’t bid competitively—that is, they don’t specify the rate they will accept. Rather, they agree to accept whatever terms are established by the competitive bids.