Who does the U.S. owe money to?

WASHINGTON — The national debt is $40.25 trillion. The short answer to who owns it: mostly Americans. About 70 percent is held domestically, by the Social Security trust funds, the Federal Reserve, mutual funds, banks, and individual investors. Foreign countries hold roughly $9.25 trillion, about 23 percent.

The two big buckets

The debt splits into two categories. Intragovernmental holdings (about $7 trillion) is money the government owes itself, mostly the Social Security and Medicare trust funds, which by law invest their surpluses in Treasury securities. Debt held by the public (about $33 trillion) is everything else: every Treasury bond, note, and bill owned by investors here and abroad.

Foreign holders: the top countries

Foreign investors hold about $9.25 trillion in Treasury securities (July 2026, U.S. Treasury TIC data). The largest holders:

• Japan: $1.10 trillion
• United Kingdom: $998 billion
• China: $618 billion, down from over $1.3 trillion at its peak
• Belgium: $471 billion
• Canada, France, Taiwan, Ireland, Luxembourg round out the top ten

Two caveats. First, TIC data tracks where bonds are held in custody, not always the ultimate owner, so some holdings attributed to financial centers like Belgium or the Cayman Islands belong to investors elsewhere. Second, China's holdings have fallen by more than half from their peak, while the UK has nearly caught Japan as the largest foreign holder.

Domestic holders

The rest, roughly $31 trillion, is held in the United States:

• Social Security and federal retirement trust funds: about $7 trillion in intragovernmental holdings
• The Federal Reserve: roughly $5 to $6 trillion, bought during quantitative easing programs
• Mutual funds, banks, pension funds, and insurance companies: the largest single group of private holders
• State and local governments and individual investors (including Series I and EE savings bonds)

Why it matters

Who holds the debt determines who gets the interest payments. At over $1 trillion a year, interest on the debt now costs more than the entire defense budget. About three-quarters of that interest stays in the U.S. economy. The foreign-held share is the part that flows abroad.