Interest on the National Debt Tracker
Every year, the federal government pays interest to the holders of Treasury bonds, notes, and bills. In fiscal 2025, net interest cost $970 billion. The Congressional Budget Office projects it will pass $1 trillion in fiscal 2026. This page tracks that cost in real time.
How interest grew so fast
| Fiscal Year | Net Interest | What happened |
|---|---|---|
| 2020 | $345B | Near-zero interest rates |
| 2022 | $475B | Federal Reserve begins raising rates |
| 2023 | $659B | Rates peak; debt keeps growing |
| 2024 | $882B | Surpasses the defense budget |
| 2025 | $970B | Approaches $1 trillion |
| 2026 (proj.) | $1.04T | CBO February 2026 projection |
| 2036 (proj.) | $2.14T | CBO projects more than doubling |
Interest vs. everything else
Net interest is now the third-largest federal expenditure, behind only Social Security and Medicare. It costs more than the entire defense budget ($893 billion in FY2025). The CBO projects interest will reach 4.6% of GDP by 2036, up from 3.2% in 2025.
Interest has nearly tripled in five years. Two forces drive it: the debt itself keeps growing, and the average interest rate the Treasury pays has risen from near zero to about 3.3%.
Who receives the interest?
Interest goes to whoever holds Treasury securities: American investors, pension funds, banks, the Federal Reserve, and foreign governments. Japan holds about $1.1 trillion in Treasuries, the United Kingdom about $998 billion, and China about $618 billion (Treasury TIC data, July 2026). Total foreign holdings are about $9.25 trillion.
Why it matters
Interest is mandatory spending. It must be paid, no matter what. Every dollar of interest is a dollar that cannot fund programs, cut taxes, or reduce the deficit. When interest grows faster than the economy, the debt feeds on itself: the government borrows to pay interest on past borrowing.
Keep learning
- Watch the live debt clock
- Debt-to-GDP ratio tracker
- Who does the U.S. owe money to?
- Get the Ledger Brief every Wednesday
Sources: U.S. Treasury Monthly Treasury Statement, September 2025 (FY2025 net interest: $970 billion). Congressional Budget Office, Budget and Economic Outlook February 2026 (FY2026 projected net interest: $1.039 trillion; 2036 projection: $2.144 trillion). Treasury International Capital data, July 2026 (foreign holdings). American Action Forum analysis of FY2025 interest costs.