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
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 .
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 will I make on a 3 month treasury bill? ›
3 Month Treasury Bill Rate is at 5.25%, compared to 5.25% the previous market day and 5.10% last year. This is higher than the long term average of 4.19%.
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 do you make on a 4 week treasury bill? ›
4 Week Treasury Bill Rate is at 5.28%, compared to 5.28% the previous market day and 4.23% last year. This is higher than the long term average of 1.41%. 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? ›
Basic Info. 1 Year Treasury Rate is at 5.25%, compared to 5.20% the previous market day and 4.86% last year. This is higher than the long term average of 2.95%. 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 T-bills better than CDs? ›
Differences between investing in CDs and T-bills
The amount you save on taxes will likely result in a higher payout from a T-bill than a CD. Another benefit of T-bills is their liquidity. You can buy and sell them on a secondary market.
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 will 100k be worth in 30 years? ›
Answer and Explanation: The amount of $100,000 will grow to $432,194.24 after 30 years at a 5% annual return. The amount of $100,000 will grow to $1,006,265.69 after 30 years at an 8% annual return.
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 happens when a 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.
What is the 6 month treasury bill rate? ›
Basic Info
6 Month Treasury Rate is at 5.44%, compared to 5.43% the previous market day and 5.14% last year. This is higher than the long term average of 2.84%.
How often do Treasury bills pay out? ›
Treasury notes are medium-term, ranging from two to 10 years, and are otherwise the same, with semiannual interest payments and the face value when they mature. Treasury bills mature within a year, do not pay interest, and are sold at a discount to the face value that you get at maturity.
How do treasury bills work for dummies? ›
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.
How do you get paid on Treasury bills? ›
What Type of Interest Payments Are Earned on a Treasury Bill? The only interest paid will be when the bill matures. At that time, you are given the full face value. T-bills are zero-coupon bonds usually sold at a discount, and the difference between the purchase price and the par amount is your accrued interest.
How do I buy treasury bills directly? ›
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). The most common maturity dates are four weeks, eight weeks, 13 weeks, 26 weeks and 52 weeks.
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.
What is the current 12 month treasury bill rate? ›
Treasury Yields
| Name | Coupon | Yield |
|---|
| GB12:GOV 12 Month | 0.00 | 5.22% |
| GT2:GOV 2 Year | 4.88 | 5.00% |
| GT5:GOV 5 Year | 4.63 | 4.68% |
| GT10:GOV 10 Year | 4.00 | 4.64% |
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