Treasury Bills (T-Bills) Information

Treasury bills are sold in terms ranging from a few days to 52 weeks. Treasury bills, also known as T-Bills, are typically sold at a discount from the par amount (also called face value).

For instance, you might pay $990 for a $1,000 Treasury bill. When the Treasury bill matures, you would be paid $1,000. The difference between the purchase price and face value is the interest.

It is possible for a Treasury 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 use Treasury bills to diversify your portfolio and participate in secure short term investments.

You can buy Treasury bills from us in Treasury Direct, Legacy Treasury Direct, banks and brokers through a non-competitive bid process. Right now, only individuals can hold accounts in Treasury Direct.

Rates and terms for T-Bills are for terms of 4, 13, 26, and 52 weeks. Another type of Treasury bill, the cash management bill, is issued in variable terms, usually of only a matter of days. The 4-week, 13-week, 26-week, and 52-week T-bills are auctioned on a regular schedule. Treasury Direct auction 4-week, 13-week, and 26-week T-bills every week. They auction 13-week and 26-week T-bills on Monday and 4-week T-bills on Tuesday. Treasury Direct auctions the 52-week T-bill every four weeks. Cash management bills aren't auctioned on a regular schedule. Bills are sold at a discount. The discount rate is determined at auction.

You can bid for a T-bill either with a noncompetitive or competitive bid. 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 Treasury Direct, Legacy Treasury Direct, or a bank, broker, or dealer. To place a competitive bid, you must use a bank, broker, or dealer.

Treasury Bills Overview:

Treasury bills are sold at a discount. The discount rate is determined at auction.

Treasury bills pay interest only at maturity. The interest is equal to the face value minus the purchase price.

Treasury 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, usually only a matter of days.

Treasury bills are issued in electronic form.

You can hold a T-bill until it matures or sell it before it matures.

In a single auction, an investor can buy up to $5 million in T-bills by non-competitive bidding or up to 35% of the initial offering amount by competitive bidding.