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 . 99986111 = $999.86111).
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 4 week treasury bill? ›
4 Week Treasury Bill Rate is at 5.28%, compared to 5.28% the previous market day and 4.32% 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.
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 3 month T bill? ›
3 Month Treasury Bill Rate is at 5.26%, compared to 5.25% the previous market day and 5.21% last year. This is higher than the long term average of 4.19%. The 3 Month Treasury Bill Rate is the yield received for investing in a government issued treasury security that has a maturity of 3 months.
What is a 1 year T bill paying today? ›
1 Year Treasury Rate is at 5.21%, compared to 5.20% the previous market day and 5.24% last year. This is higher than the long term average of 2.95%.
What is the best way to buy Treasury bills? ›
Where to buy Treasury bonds, notes or bills. While you can buy Treasurys like T-bonds directly from the source — the U.S. government — one of the most common ways people add them to their portfolio is by investing in Treasury exchange-traded funds or mutual funds through bank, brokerage or retirement accounts.
Why don't people invest in the treasury bill? ›
Taxes: Treasury bills are exempt from state and local taxes but still subject to federal income taxes. That makes them less attractive holdings for taxable accounts. Investors in higher tax brackets might want to consider short-term municipal securities instead.
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.
Should I put all my money in Treasury bills? ›
Are Treasury bills a good investment? Ultimately, whether Treasury bills are a good fit for your portfolio depends on your risk tolerance, time horizon and financial goals. T-bills are known to be low-risk short-term investments when held to maturity since the U.S. government guarantees them.
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.
Are T-bills tax free? ›
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.
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.
How to get 5% return? ›
Money market funds
Not to be confused with money market accounts, which are deposit accounts, a money market fund is an investment account that can also provide a relatively low-risk way to earn 5% or more.
How much is a $100 savings bond worth after 20 years? ›
How to get the most value from your savings bonds
| Face Value | Purchase Amount | 20-Year Value (Purchased May 2000) |
|---|
| $50 Bond | $100 | $109.52 |
| $100 Bond | $200 | $219.04 |
| $500 Bond | $400 | $547.60 |
| $1,000 Bond | $800 | $1,095.20 |
May 7, 2024
A 10-year Treasury note is a debt obligation issued by the US government that matures in 10 years. It pays interest twice a year and face value at maturity. A bond is a fixed-income investment that represents a loan made by an investor to a borrower, usually corporate or governmental.
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.
Which bank can I buy Treasury bills? ›
Purchase your Treasury Bills through GTBank by visiting any of our branches or by speaking to your Relationship Manager.
How do I open a treasury bill account? ›
You only need these things to open an Individual TreasuryDirect account:
- A Taxpayer Identification Number. (Social Security Number for an individual)
- A United States Address of Record.
- A Checking or Savings Account. ...
- An E-mail Address. ...
- A Web Browser That Supports 128-Bit Encryption.
While interest rates and inflation can affect Treasury bill rates, they're generally considered a lower-risk (but lower-reward) investment than other debt securities. Treasury bills are backed by the full faith and credit of the U.S. government. If held to maturity, T-bills are considered virtually risk-free.
