Can you buy Treasury bills at a bank?
Individuals, organizations, fiduciaries, and corporate investors may buy
T-bills sell in increments of $100 up to a maximum of $10 million, and you can buy them directly from the government through its TreasuryDirect website, or through a brokerage, bank or self-directed retirement account, like a Roth IRA.
There are several ways to buy Treasuries. For many people, TreasuryDirect is a good option; however, retirement savers and investors who already have brokerage accounts are often better off buying bonds on the secondary market or with exchange-traded funds (ETFs).
| Now issued in | Electronic form only |
|---|---|
| Interest paid | When the bill matures |
| Minimum purchase | $100 |
| In increments of | $100 |
| Maximum purchase | $10 million (non-competitive bid) 35% of offering amount (competitive bid) (See Buying a Treasury marketable security for information on types of bids.) |
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).
1 Year Treasury Rate (I:1YTCMR)
1 Year Treasury Rate is at 4.94%, compared to 4.99% the previous market day and 4.99% last year. This is higher than the long term average of 2.93%.
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.
T-Bill Tax Considerations
The interest income that you may receive from investing in a treasury bill is exempt from any state or local income taxes, regardless of the state where you file your taxes. However, you will need to report interest income from these investments on your federal tax return.
3 Month Treasury Bill Rate is at 5.23%, compared to 5.25% the previous market day and 4.67% 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.
T-bills have a key advantage over CDs: They're exempt from state income taxes. The same is true with Treasury notes and Treasury bonds. If you live in a state with income taxes, and rates are similar for CDs and T-bills, then it makes sense to go with a T-bill.
Can I buy Treasury bills myself?
You can buy them from the government directly, and many buy them through a brokerage, retirement or bank account. Treasury owners pay federal taxes on the investment interest earned but no state or local taxes.
Buy T-Bills in a Brokerage Account
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.
T-bills are sold at face value or at a “discount.” And once they mature, you get the face value in return. The difference between the face value and the discounted price you initially paid is “interest.” That discount represents the rate of return you can expect once your T-bill reaches maturity.
Choosing your investment
Yields aren't the only consideration when choosing among T-bills, CDs and money-market funds. While all are considered exceptionally safe, CDs can't be liquidated early without triggering an early-withdrawal penalty.
Shutdowns have occurred more than 20 times since 1976. Unlike a default, a shutdown does not affect the government's ability to pay its obligations, and, as noted, many critical services continue.
Minimum S$1,000, and in multiples of S$1,000. There is no maximum amount an individual can hold, but there are limits for each auction. You can submit up to S$1 million in non-competitive bids at each T-bill auction.
The minimum amount that you can purchase of any given Treasury Bill, Note, Bond, TIPS, or FRNs is $100.
6 Month Treasury Bill Rate is at 5.11%, compared to 5.12% the previous market day and 4.83% last year. This is higher than the long term average of 4.49%. The 6 Month Treasury Bill Rate is the yield received for investing in a US government issued treasury bill that has a maturity of 6 months.
4 Week Treasury Bill Rate is at 5.28%, compared to 5.28% the previous market day and 4.53% last year. This is higher than the long term average of 1.37%. 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.
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.)
How do I sell my Treasury bills?
To sell a bill you hold in TreasuryDirect or Legacy TreasuryDirect, first transfer the bill to a bank, broker, or dealer, then ask the bank, broker, or dealer to sell the bill for you. How you transfer a bill to a bank, broker, or dealer depends on whether you hold the bill in TreasuryDirect or Legacy TreasuryDirect.
In 2022, Buffett's Berkshire Hathaway held a whopping $126 billion in U.S. Treasury bills. Buffett reportedly prefers T-bills to other options because he never wants to worry about whether or not Berkshire's pile of cash is safely invested.
Compared with Treasury notes and bills, Treasury bonds usually pay the highest interest rates because investors want more money to put aside for the longer term. For the same reason, their prices, when issued, go up and down more than the others.
Cons: Lower Returns: While treasuries are safe, their yields are generally lower than riskier assets like stocks or corporate bonds. Short-term investors may find their returns to be relatively modest.
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.
