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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →To buy a U.S. Treasury bill, choose a term, then submit a noncompetitive auction bid through TreasuryDirect or a bank, broker, or dealer. At maturity, the bill pays its face value; your dollar return is that payment minus what you paid. The auction price—and not the discount rate by itself—determines how much you earn.
What a Treasury bill is—and which terms are available
A Treasury bill, or T-bill, is an electronic U.S. government marketable security with a term of one year or less. Unlike a bond that pays periodic coupons, a bill is sold at a discount to its face value and pays that face value at maturity. The difference is the interest earned if you hold it to maturity.
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Treasury lists bills with terms of 4, 6, 8, 13, 17, 26, and 52 weeks. The minimum purchase is $100, with additional purchases in $100 increments. Auctions are generally weekly for the 4-, 6-, 8-, 13-, 17-, and 26-week bills; the 52-week bill is auctioned every four weeks. Schedules can change, so check the Treasury auction calendar for a particular offering.
Choose where and how to place your bid
| Route | Bid types | Key considerations |
|---|---|---|
| TreasuryDirect | Noncompetitive only | You accept the auction-determined rate. TreasuryDirect publishes a $10 million maximum for a noncompetitive bid. To sell before maturity, a TreasuryDirect-held bill must first be transferred to a Commercial Book-Entry System account; Treasury says a fee normally applies to this service. |
| Bank, broker, or dealer | Noncompetitive or competitive | An intermediary can submit either bid type. Competitive bids specify the rate you will accept and may receive a full, partial, or no award. Ask the institution about its procedures and any charges, including for an early sale. |
Treasury identifies both routes but does not designate one as best for every investor. Consider whether you already have access to an account, whether you want the option of selling before maturity, and what fees or service charges may apply. TreasuryDirect accepts noncompetitive bids only; competitive bids must go through an intermediary. See TreasuryDirect’s guidance on buying Treasury bills and Treasury bill auctions.
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How to buy a bill through TreasuryDirect
- Choose a term and offering. Select a listed bill term that fits when you may need the money, then confirm the offering date on Treasury’s auction calendar. The rate is set at auction, not when you schedule a purchase.
- Submit a noncompetitive bid. In TreasuryDirect, enter the amount you want to buy and the required purchase details. You agree to accept the rate determined by the auction; Treasury says noncompetitive bids are awarded in full within the applicable maximum.
- Review the auction result and price. After the auction, TreasuryDirect displays the price per $100. Check the result before the issue date so you know the amount that will be paid.
- Have funds available. TreasuryDirect withdraws the purchase funds from the source you specified before the bill is issued. Confirm the account has sufficient funds for that withdrawal.
For an intermediary, follow that institution’s process and verify whether you are placing a noncompetitive or competitive bid. A competitive bid specifies a rate you are willing to accept, and the auction may award all, part, or none of the requested amount.
Calculate what you earn if you hold to maturity
The basic dollar calculation is:
Dollar return at maturity = face value − purchase price
Treasury’s bill-pricing formula is Price = Face value × (1 − (discount rate × time) / 360), where time is the bill’s term in days. The discount rate helps determine the purchase price; it is not itself the dollar amount you receive.
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For illustration—not as a current rate or quote—Treasury gives the example of a $1,000 face-value, 182-day bill sold at a 0.145% discount rate. The resulting price is $999.27. At maturity, the investor receives $1,000, so the difference is $0.73. The example uses Treasury’s 360-day pricing basis. See Treasury’s explanation of bill pricing and interest rates.
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That $0.73 is the dollar difference in this example, not an annualized return or an after-tax estimate. To compare investments using annualized returns, use the actual auction price and term and state the yield convention used; discount rates and other yield measures are not automatically interchangeable.
If you sell before the bill matures
You can sell a bill before maturity, but you receive the prevailing secondary-market price rather than automatically receiving face value. That price can be higher or lower than the amount you paid, so the maturity calculation above does not describe an early sale’s result. TreasuryDirect-held bills must be transferred to a Commercial Book-Entry System account before they can be sold. Bills held through a broker or other institution are handled through that provider; Treasury says a fee normally applies to its transfer service.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Understand the tax treatment
Treasury states that interest earned from Treasury marketable securities is subject to federal tax and exempt from state and local income tax. TreasuryDirect account holders can access a detailed listing of taxable transactions and annual tax forms. These general rules do not calculate your individual after-tax return; confirm how they apply to your circumstances.
Check the details for the specific auction
Terms, auction schedules, results, procedures, intermediary charges, and tax rules can change. For a planned purchase, use Treasury’s current offering announcement and auction result, and check your institution’s terms if you are buying or selling through an intermediary.
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