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.
FAQs
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.)
What is the best way to buy Treasury bills? ›
You can only buy T-bills in electronic form, either from a brokerage firm or directly from the government at TreasuryDirect.gov. (You can also buy Series I savings bonds through TreasuryDirect.gov). Versus Treasury bonds, Treasury bills have shorter maturity dates.
What happens when a treasury bill matures on TreasuryDirect? ›
When the bill matures, you are paid its face value. You can hold a bill until it matures or sell it before it matures. Note about Cash Management Bills: We also sell Cash Management Bills (CMBs) at various times and for variable terms. Cash Management Bills are only available through a bank, broker, or dealer.
What is the 6 month Treasury bill rate today? ›
6 Month Treasury Bill Rate (I:6MTBRNK)
6 Month Treasury Bill Rate is at 4.34%, compared to 4.37% the previous market day and 5.30% last year. This is lower than the long term average of 4.49%.
How much will I make on a 4 week treasury bill? ›
4 Week Treasury Bill Rate is at 4.69%, compared to 4.71% the previous market day and 5.29% last year. This is higher than the long term average of 1.48%. 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.
Are Treasury bills better than CDs? ›
Currently, Treasuries maturing in less than a year yield more than CDs. However, at maturities of one year and beyond, CDs yield a little more before taxes. Therefore, all things considered, it likely makes more sense to choose Treasuries over CDs for shorter-term investments, but it depends on your situation.
How much does a $10,000 Treasury bill cost? ›
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. Once the year is up, you get back your initial investment plus another $300.
Does Warren Buffett buy Treasury bills? ›
Buffett likes cash—particularly U.S. Treasury bills—and stocks, although he has reduced Berkshire's big equity portfolio with Barron's estimating sales of Apple stock at around $85 billion this year.
Is there a fee to buy Treasury bills? ›
T-bills are generally held either until the maturity date or cashed before maturity. Investors can buy T-bills in electronic form from a brokerage firm, which could cost a small fee, or directly from TreasuryDirect, the platform of the U.S. Treasury.
What day of the week should I buy Treasury bills? ›
Treasury Bills
Except for holidays or special circumstances, the offering is announced on Tuesday, the bills are auctioned on Thursday, and they are issued on the following Tuesday.
Do Treasury bills get taxed? Yes, Treasury bills are taxed at the federal level using your marginal rate. However, income earned from Treasury bills is not subject to state tax or local income taxes.
What is the 45 day rule for TreasuryDirect? ›
TreasuryDirect requires Treasury marketable securities be held for 45 days following original issue before they may be transferred. 4-Week Bills bought at original issue in TreasuryDirect may not be transferred at all because the term of the security is less than 45 days.
What is the 1 year treasury bill rate? ›
1 Year Treasury Rate is at 3.92%, compared to 3.93% the previous market day and 5.46% last year. This is higher than the long term average of 2.97%. 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.
How to buy T-bills? ›
To buy, you must have a TreasuryDirect account. In TreasuryDirect, you may open an account and buy Treasury marketable securities for yourself (an individual registration). With an individual registration, you may also link your account to an account for a child under the age of 18.
How often does a 6 month Treasury bill pay? ›
T-bills are sold at a discount to their face value and don't pay periodic interest. Instead, investors receive the full face value at maturity, with the difference representing their return. Treasury notes and bonds, meanwhile, pay interest every six months and return the principal upon maturity.
What is the 3 month Treasury bill rate? ›
Basic Info
3 Month Treasury Bill Rate is at 4.61%, compared to 4.65% the previous market day and 5.33% last year.
Can I buy more than $10,000 in Treasury bills? ›
A given Social Security Number or Employer Identification Number can buy up to these amounts in savings bonds each calendar year: $10,000 in electronic EE bonds. $10,000 in electronic I bonds. $5,000 in paper I bonds that you can buy when you file federal tax forms until January 1, 2025 (See our FAQ).
Is it better to buy Treasury bills at auction or on secondary market? ›
Buying treasuries through a broker on the secondary market typically offers investors more control to trade and manage their bonds.
What's the difference between treasury bonds and Treasury bills? ›
Key takeaways
Treasury bills have short-term maturities and pay interest at maturity. Treasury notes have mid-range maturities and pay interest every 6 months. Treasury bonds have long maturities and pay interest every 6 months.
