To buy Treasury bills, open a free TreasuryDirect account with the US Treasury and place a non-competitive bid in an upcoming auction, or ask a bank or brokerage to buy them for you at auction or from other investors. Bills cost as little as $100, mature in four to 52 weeks and pay their full face value at maturity.
Treasury bills are the government’s shortest-term debt. They suit cash you will need within a year and want to keep safe from market swings. The steps below apply in any rate environment. Current figures are in a dated section near the end.
What is a Treasury bill and how does it pay interest?
A Treasury bill does not pay a coupon. You buy it below face value, or at face value, and the Treasury pays you the full amount when it matures. The difference is your interest. Bills are issued only in electronic form, and the Treasury sells them in seven regular terms: 4, 6, 8, 13, 17, 26 and 52 weeks.
The Treasury publishes the formula it uses to turn an auction discount rate into a price: price equals face value multiplied by one minus the discount rate times the number of days to maturity, divided by 360. As an illustration, a $1,000 26-week bill (182 days) sold at a 4.00 percent discount rate would cost about $979.78 and pay $1,000 at maturity, a gain of about $20.22. The rate is calculated on face value and a 360-day year, so the discount rate comes out slightly lower than the annual return on the money you actually pay.
Interest on bills is subject to federal income tax but exempt from state and local income taxes, the Treasury says. In high-tax states, that can make a bill worth more after tax than a bank deposit or fund paying a similar headline rate.
How do you buy Treasury bills on TreasuryDirect?
TreasuryDirect is the Treasury’s own platform for buying and holding marketable securities and savings bonds. It charges no fees. The process looks like this:
- Open a TreasuryDirect account and link a bank account. Individuals can link accounts for children under 18, and entities such as trusts, estates and corporations can open their own accounts.
- Choose the Buy Direct tab, pick the bill term and enter the amount, in $100 increments from $100 up to $10 million.
- Decide whether to set up automatic reinvestment, which rolls a maturing bill into a new one of the same type.
- After 5 p.m. Eastern time on auction day, check Pending Purchases and Reinvestments to see the price set at auction.
- Make sure the money is in your bank account before the issue date, when the Treasury collects payment.
TreasuryDirect accepts only non-competitive bids. That means you are guaranteed to receive the full amount you ask for, but you accept whatever rate the auction sets. You will not know the rate when you place the order. The 4-, 6-, 8-, 13-, 17- and 26-week bills are auctioned every week. The 52-week bill is auctioned every four weeks. Dates are on the Treasury’s auction calendar.
One drawback is liquidity. Bills bought in TreasuryDirect must be held for at least 45 calendar days before they can be sold or transferred, unless they were bought by reinvesting a maturing security. Investors who might need the cash sooner usually do better at a broker.
How do you buy Treasury bills through a broker or bank?
Banks, brokers and dealers can place both non-competitive and competitive bids, though not both in the same auction. A competitive bid names the lowest rate you will accept. If the auction clears at a higher rate you get everything you bid for, at the clearing rate you might get only part, and below it you get nothing. Competitive bids are capped at 35 percent of the amount being offered, so in practice they matter mostly to institutions.
Brokerage accounts also let investors buy bills that are already trading and sell them before maturity without a holding period. Fees, minimums and settlement rules vary by firm. Cash management bills, which the Treasury sells on an irregular schedule and for varying terms, are available only through a bank, broker or dealer, not through TreasuryDirect.
How do Treasury bill rates compare with money market and I bond rates?
Money market fund yields generally follow short-term rates such as the federal funds rate and bill yields, but they change daily and carry fund expenses. Bills lock in a rate until maturity and come with the state tax exemption. Funds offer same-day or next-day access with no maturity date to manage.
Series I savings bonds work differently. Their rate combines a fixed rate that never changes and an inflation rate that resets every six months. They can be bought only through TreasuryDirect, from $25, and are limited to $10,000 per Social Security number per calendar year. They cannot be cashed for 12 months, and redeeming before five years costs the last three months of interest. That makes I bonds a medium-term inflation hedge, not a substitute for cash.
Where Treasury bill rates stand (as of November 5, 2026)
The yield on the 13-week Treasury bill was 3.987 percent in late trading on November 5, down 3.8 basis points on the day and about 20 basis points higher than a year earlier, when it stood near 3.79 percent. After spending most of the first half of 2026 between about 3.5 percent and 3.6 percent, it rose above 4 percent in late September and peaked near 4.09 percent in mid-October before easing.
The 13-week T-bill yield climbed above 4% this autumn before easing
US 13-week Treasury bill yield, sampled roughly every two weeks
Source: Market data via Economy & Markets data feed
Longer maturities currently pay more. The 5-year Treasury yield was 4.608 percent and the 10-year yield was 4.837 percent at the same point, about 85 basis points above the 13-week bill. The effective federal funds rate, the benchmark that money market fund yields tend to track, was 3.88 percent on November 4 and has not changed since at least the end of September, according to Federal Reserve data.
Inflation reduces what those yields are worth in real terms. Consumer prices rose 4.02 percent in the year to September, according to Labor Department data compiled by the St. Louis Fed. That puts the 13-week bill yield roughly level with, or slightly below, inflation. Series I savings bonds issued from November 1, 2026, to April 30, 2027, earn 5.51 percent, the Treasury says, including a fixed rate of 1.40 percent that lasts for the life of the bond.
What should you check before you buy?
- Match the term to when you will need the money, and remember the 45-day holding period on TreasuryDirect purchases.
- Compare after-tax returns, since bill interest is exempt from state and local income tax.
- Check the auction calendar, because the rate is set at auction and is not known when you place a non-competitive bid.
- Decide in advance whether to reinvest at maturity or have the proceeds paid to your bank account.
