Treasury Bills In Depth — TreasuryDirect (2024)

Treasury bills, or bills, are typically issued at a discount from the par amount (also called face value). For example, if you buy a $1,000 bill at a price per $100 of $99.986111, then you would pay $999.86 ($1,000 x .99986111 = $999.86111).* When the bill matures, you would be paid its face value, $1,000. Your interest is the face value minus the purchase price. It is possible for a bill auction to result in a price equal to par, which means that Treasury will issue and redeem the securities at par value.

You can buy a bill in TreasuryDirect or through a bank or broker. The table below shows the types of bills available for purchase by both means. (We no longer sell bills in Legacy Treasury Direct, which we are phasing out.)

Term TreasuryDirect Bank or Broker
4-Week Bill Yes Yes
8-Week Bill Yes Yes
13-Week Bill Yes Yes
17-Week Bill Yes Yes
26-Week Bill Yes Yes
52-Week Bill Yes Yes
Cash Management Bills No Yes

You can bid for a bill in two ways:

  • With a noncompetitive bid, you agree to accept the discount rate determined at auction. With this bid, you are guaranteed to receive the bill you want, and in the full amount you want.
  • With a competitive bid, you specify the discount rate you are willing to accept. Your bid may be: 1) accepted in the full amount you want if the rate you specify is less than the discount rate set by the auction, 2) accepted in less than the full amount you want if your bid is equal to the high discount rate, or 3) rejected if the rate you specify is higher than the discount rate set at the auction.

To place a noncompetitive bid, you may use TreasuryDirect, or a bank or broker.

To place a competitive bid, you must use a bank or broker.

Key Facts:

  • Bills are sold at a discount. The discount rate is determined at auction.
  • Bills pay interest only at maturity. The interest is equal to the face value minus the purchase price.
  • Bills are sold in increments of $100. The minimum purchase is $100.
  • All bills except 52-week bills and cash management bills are auctioned every week. The 52-week bill is auctioned every four weeks. Cash management bills aren't auctioned on a regular schedule.
  • Cash management bills are issued in variable terms.
  • Bills are issued in electronic form.
  • You can hold a bill until it matures or sell it before it matures.
  • In a single auction, a bidder can buy up to $10 million in bills by non-competitive bidding or up to 35% of the initial offering amount by competitive bidding.

*Treasury rounds to the nearest penny using conventional mathematical rounding methods.

Treasury Bills In Depth — TreasuryDirect (2024)

FAQs

Treasury Bills In Depth — TreasuryDirect? ›

Bills are issued in electronic form. You can hold a bill until it matures or sell it before it matures. In a single auction, a bidder can buy up to $10 million in bills by non-competitive bidding or up to 35% of the initial offering amount by competitive bidding.

Can I buy Treasury bills through TreasuryDirect? ›

TreasuryDirect provides a web-based environment for buying and holding Treasury Bills, Notes, Bonds, TIPS, and FRNs, as well as Savings Bonds. You cannot purchase Cash Management Bills in TreasuryDirect.

How much can you make on a 3 month Treasury bill? ›

Basic Info. 3 Month Treasury Rate is at 5.45%, compared to 5.45% the previous market day and 5.10% last year. This is higher than the long term average of 2.70%.

How much does a $1000 T bill cost? ›

To calculate the price, take 180 days and multiply by 1.5 to get 270. Then, divide by 360 to get 0.75, and subtract 100 minus 0.75. The answer is 99.25. Because you're buying a $1,000 Treasury bill instead of one for $100, multiply 99.25 by 10 to get the final price of $992.50.

How much will I earn on a 4 week Treasury bill? ›

4 Week Treasury Bill Rate is at 5.28%, compared to 5.28% the previous market day and 4.04% last year. This is higher than the long term average of 1.40%. The 4 Week Treasury Bill Rate is the yield received for investing in a US government issued treasury bill that has a maturity of 4 weeks.

What is the safest way to buy Treasury bills? ›

Buy Treasury bills through a broker or financial advisor

Similar to banks, brokers and advisors can help you buy T-bills, but they may also provide additional services like financial advice or portfolio management.

What is a 1 year T bill paying today? ›

1 Year Treasury Rate (I:1YTCMR)

1 Year Treasury Rate is at 5.13%, compared to 5.17% the previous market day and 4.66% last year. This is higher than the long term average of 2.94%. The 1 Year Treasury Rate is the yield received for investing in a US government issued treasury security that has a maturity of 1 year.

Are Treasury bills better than CDs? ›

Choosing between a CD and Treasuries depends on how long of a term you want. For terms of one to six months, as well as 10 years, rates are close enough that Treasuries are the better pick. For terms of one to five years, CDs are currently paying more, and it's a large enough difference to give them the edge.

What happens when T Bill matures? ›

When the bill matures, you are paid its face value. You can hold a bill until it matures or sell it before it matures.

Do you pay taxes on T-bills? ›

Key Takeaways

Interest from Treasury bills (T-bills) is subject to federal income taxes but not state or local taxes.

How much does a $10000 treasury bill cost? ›

Once the securities mature, the government hands over the full amount of the bill. Here's an example of how the process works. Let's say you purchase a $10,000 T-bill with a discount rate of 3% that matures after 52 weeks. That means you pay $9,700 for the T-bill upfront.

What is the 6 month treasury bill rate? ›

U.S. 6 Month Treasury US6M:Tradeweb
  • Yield Open5.379%
  • Yield Day High5.411%
  • Yield Day Low5.339%
  • Yield Prev Close5.366%
  • Price5.14.
  • Price Change-0.015.
  • Price Change %-0.291%
  • Price Prev Close5.155.

Can I buy a T-Bill at a bank? ›

You can buy (bid for) Treasury marketable securities through: your TreasuryDirect account — non-competitive bids only. a bank, broker, or dealer — competitive and non-competitive bids.

What is the T-bill ladder strategy? ›

A T-Bill ladder is a strategy that involves sequentially purchasing investment-grade T-Bills that mature at different times in the near future. This latter point is where T-Bill ladders differ from the bond ladder strategy, which focuses on purchasing bank certificates of deposits (CDs) or bonds with longer maturities.

How much does a 1 month T-bill pay? ›

Basic Info. 1 Month Treasury Rate is at 5.48%, compared to 5.48% the previous market day and 4.08% last year. This is higher than the long term average of 1.44%. The 1 Month Treasury Rate is the yield received for investing in a US government issued treasury bill that has a maturity of 1 month.

How do you get paid on Treasury bills? ›

The only interest payment to you occurs when your bill matures. At that time, you are paid the par amount (also called face value) of the bill.

Can I buy Treasury bills myself? ›

Investors who wish to purchase T-bills for individual retirement accounts must go through their broker, as it is not possible to fund an IRA via TreasuryDirect. Investors can also buy T-bills in the secondary market, although purchasing new issues is generally a wiser option.

How much does it cost to buy the T Bill? ›

Bills are sold in increments of $100. The minimum purchase is $100. All bills except 52-week bills and cash management bills are auctioned every week.

How do I buy Treasury bonds on TreasuryDirect? ›

To buy a savings bond in TreasuryDirect:
  1. Go to your TreasuryDirect account.
  2. Choose BuyDirect.
  3. Choose whether you want EE bonds or I bonds, and then click Submit.
  4. Fill out the rest of the information.

Do you pay taxes on Treasury bills? ›

Key Takeaways

Interest from Treasury bills (T-bills) is subject to federal income taxes but not state or local taxes. The interest income received in a year is recorded on Form 1099-INT. Investors can opt to have up to 50% of their Treasury bills' interest earnings automatically withheld.

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