A Treasury bill, or T-bill, is a short-term security sold by the US Treasury that matures in a year or less. You usually pay less than its face value, Treasury pays you the full face value at maturity, and the difference is your interest. Nothing is paid in between.
Almost everything else follows from that: why a bill is quoted with two numbers, how the auction sets your price, what an early exit costs and whom a bill suits. Bill auctions run every week, so this page prints no current yield; it shows where Treasury publishes the results instead, and every worked number on it is illustrative.
What a Treasury bill is
Treasury's auction rules define bills as securities issued at a discount or at par (face value), redeemed at par, with "maturities of not more than one year". TreasuryDirect, the Treasury's own site for buying directly, lists seven regular terms: 4, 6, 8, 13, 17, 26 and 52 weeks. The 17-week bill dates from October 2022, and the 6-week bill joined the regular line-up with its first benchmark auction on 18 February 2025.
| Bill | How often Treasury auctions it | Where it can be bought |
|---|---|---|
| 4, 6, 8, 13, 17 and 26 weeks | Every week | TreasuryDirect, or a bank, broker or dealer |
| 52 weeks | Every four weeks | TreasuryDirect, or a bank, broker or dealer |
| Cash management bills | No regular schedule; variable terms | A bank, broker or dealer only |
Cash management bills are extra bills Treasury offers "when needed", and the one kind TreasuryDirect does not sell. All bills are now electronic. The minimum is $100, in steps of $100, and a bill is marketable: TreasuryDirect's word for a security you can transfer to someone else and sell before it matures.
Discount pricing: pay less now, receive face value later
TreasuryDirect puts the word in quotation marks: for bills, "interest" is "the difference between what you paid and the face value you get when the bill matures". There is no coupon and no payment along the way.
The price has a ceiling. Treasury's rules say a competitive bill bid is a discount rate that "may be a positive number or zero", and a zero discount rate prices a bill at exactly its face value. So an auction can end at par, a zero return, which TreasuryDirect confirms can happen, but not above it; in December 2008 the 4-week bill did close at zero, for the first time since the Depression. The ceiling is the auction's. A bill bought later from another investor costs whatever the market asks.
A 26-week bill priced from the formula (illustrative)
The appendix to Treasury's auction rules prices a bill per $100 of face value:
Price per $100 = 100 × (1 − d × r ÷ 360)
where d is the discount rate as a decimal and r the days to maturity. Treasury works the price to six decimal places and rounds what you pay to the cent; TreasuryDirect's pricing page gives the same formula in dollars. Take a 26-week bill, which Treasury's announcements call a 182-day bill, at an illustrative discount rate of 4.000%:
- Price per $100: 100 × (1 − 0.04 × 182 ÷ 360) = 97.977778.
- A $1,000 bill costs 1,000 ÷ 100 × 97.977778 = $979.78 and pays $1,000 at maturity: $20.22 of interest.
- A $10,000 bill costs $9,797.78 and earns $202.22.
The same illustrative 4.000% applied to two other terms:
| Bill, at an illustrative 4.000% discount rate | Days | Price per $100 | A $1,000 bill costs | Interest at maturity | Investment rate |
|---|---|---|---|---|---|
| 13-week | 91 | 98.988889 | $989.89 | $10.11 | 4.097% |
| 26-week | 182 | 97.977778 | $979.78 | $20.22 | 4.139% |
| 52-week | 364 | 95.955556 | $959.56 | $40.44 | 4.183% |
A real bill's day count comes from its own issue and maturity dates, and the 4.000% is a round illustrative figure, not a forecast or a recent result.
Why every bill carries two numbers
The 4.000% in the illustration is the discount rate: the interest as a share of the face value, annualised over a 360-day year. Bids are made in it and the price is calculated from it. But you pay the price, not the face value, and a year has 365 days.
The investment rate, which Treasury's rules also call the coupon-equivalent yield, corrects both. TreasuryDirect defines it as "an annualized simple interest rate based on a 365-day year (366-day basis for a leap year), without compounding". For a bill of half a year or less:
Investment rate = (100 − price) ÷ price × 365 ÷ days to maturity
with 366 in place of 365 when the year after the issue date contains 29 February. For the illustrative 26-week bill that is (100 − 97.977778) ÷ 97.977778 × 365 ÷ 182 = 4.139%. The gap from 4.000% is the two conventions and nothing else: 4.000% × (1,000 ÷ 979.78) × (365 ÷ 360) also gives 4.139%. The 52-week bill uses a longer formula from the same appendix, so that shortcut does not carry over to it, but in all three illustrative cases the investment rate is the higher number.
Which number to set beside a CD's APY
The investment rate, because it is annualised on the money you actually put in. In the illustration, quoting the 4.000% discount rate against a CD would understate the bill's return on the money paid by 0.139 of a point. But neither number is an APY: an APY includes compounding, and the investment rate, by Treasury's own definition, does not. APR vs APY shows what compounding adds and why the gap grows as rates rise; at illustrative levels like these it is small, but it is not nothing.
How the auction works for a retail buyer
To buy a new bill from Treasury you bid at its auction, in one of two ways.
A non-competitive bid names an amount, not a price. You are "guaranteed to get the security you want in the amount you want" and accept the rate the auction sets. It is the only kind a TreasuryDirect account can place, capped at $10 million per auction for each type and term of security, however you buy.
A competitive bid names the discount rate the bidder will accept and must go through a bank, broker or dealer. Below the rate the auction sets, it is filled in full; at that rate, perhaps only in part; above it, not at all.
Treasury fills the valid non-competitive bids first, then accepts competitive bids from the lowest rate upward until the offering is sold. The highest rate accepted, the high discount rate, sets one price for every winning bidder, because Treasury auctions are now single-price. The catch for a non-competitive bidder: when you place the order, as TreasuryDirect puts it, "you don't know the interest rate".
From announcement to maturity
| Step | What happens | What it means for you |
|---|---|---|
| Announcement | Treasury publishes the security, the offering amount, the auction, issue and maturity dates, and the closing times for bids | A non-competitive bid must arrive before the closing time it gives |
| Auction | Non-competitive bids are filled; competitive bids set the high discount rate | Your price is fixed, and TreasuryDirect shows the result on auction day, after the auction closes |
| Issue date | The bill is issued and paid for from the account you designated | The money must be there; in TreasuryDirect, a returned debit removes the bill and there is no second attempt |
| Maturity | Treasury pays the face value | TreasuryDirect pays it automatically to your bank account or to its zero-interest holding balance, unless you scheduled a reinvestment |
Payment is taken on the issue date, which can be days or even weeks after the auction. The usual pattern for 13- and 26-week bills is an announcement on a Thursday, the auction the following Monday and issue on the Thursday of that week, but TreasuryDirect warns that Treasury's needs, policy decisions and congressional action on the debt limit can change it, that holidays and special circumstances can disrupt it, and that a weekend or federal holiday pushes the issue date to the next business day. On 13 October 2026, for instance, the 26-week bill was auctioned on a Tuesday. Each auction's announcement is the schedule to rely on.
Where to find this week's results, and why none are printed here
Treasury publishes every auction's results on TreasuryDirect once it closes: for a bill, the high discount rate, the price per $100 and the investment rate, with details such as the bid-to-cover ratio. TreasuryDirect's Treasury bills page links to recent bill results, and a TreasuryDirect account shows the outcome of your own purchase on auction day.
This page prints none of them. With most terms auctioned weekly, a printed figure would be out of date within days and wrong on a date nobody noticed; the illustrative numbers above show how a result becomes a price, not what a bill pays now. To compare a real bill with a real deposit, take the investment rate from the latest result for your term and set it beside the deposit's APY on the same day.
Who stands behind a T-bill
A bill is an obligation of the United States government. TreasuryDirect says Treasury marketable securities "are backed by the full faith and credit of the United States government", and its FAQ gives that as the reason they are considered safe: interest and principal "will be paid on time".
It is not a bank deposit and not FDIC-insured. The FDIC's list of financial products it does not insure names "U.S. Treasury Bills, Bonds or Notes", noting that they are backed by the full faith and credit of the U.S. government, and its insurance guide adds that investment products like these are not covered even when an insured bank sells them. The CD insurance page sets out what deposit insurance does cover. The government's guarantee is about payment on time; it does not fix the price of a bill sold early. A government money market fund that holds bills is different again: it is a mutual fund, which the FDIC also lists as not insured, as money market vs high-yield savings explains.
How T-bill interest is taxed
Bill interest is subject to federal income tax but exempt from state and local income taxes: taxable, not tax-free. The exemption's value depends on your state and bracket, and is nothing in a state with no income tax, which is why HYSA vs CD vs T-bills compares a bill with a savings account and a CD after tax rather than on headline numbers.
Where you can buy them
TreasuryDirect sells bills only at auction, takes only non-competitive bids and charges no fees. A bank, broker or dealer can place either kind of bid and may charge for its services, and it is also the route to cash management bills and to bills already trading on the secondary market.
One dated change: TreasuryDirect retires its traditional login on 28 October 2026, and beginning 29 October 2026, ID.me is required to log in to TreasuryDirect; Login.gov cannot be used instead.
Selling a T-bill before it matures
A bill has no early-withdrawal penalty, because there is nothing to withdraw from. Getting out early means selling, through a bank, broker or dealer, at that day's market price, which reflects any move in rates since you bought. For a short bill the swing is small but not zero, as the HYSA, CD and T-bill comparison notes, and a broker normally charges a fee. It is the mechanism the brokered CD page prices for a certificate sold early, and a different kind of cost from a bank CD's early-withdrawal penalty, which is a term of the contract.
Bills held in TreasuryDirect come with three extra conditions, because TreasuryDirect does not sell for you:
- Transfer out first. The bill has to be moved to a bank, broker or dealer before it can be sold, through TreasuryDirect's External Transfer and FS Form 5511, signed in front of a certifying officer. A notary's certification is not accepted.
- Wait 45 days. A bill bought in TreasuryDirect must stay there for 45 days before it can be sold or transferred. A 4-week bill matures sooner, so one bought there can never be sold early or transferred at all.
- Not in the last four business days. For the four business days before a bill matures, TreasuryDirect allows no transfers.
The 45-day hold applies to bills bought in TreasuryDirect, not to those transferred in from a bank or broker, nor to a reinvestment paid for entirely by the maturing bill.
Who T-bills suit, and who they do not
None of this makes a bill better or worse than a bank deposit, only different. The trade-offs:
Where a bill tends to fit
- Money needed on a known date within a year. The price is set at the auction and the face value and maturity date are known in advance, so a dated payment, such as a tax payment or a tuition instalment, can be matched to a term.
- Savers in a state with an income tax, for whom the exemption is worth something; the comparison page above prices it.
- Anyone who prefers the government's own obligation to a bank deposit, accepting that the protection is a promise to pay, not deposit insurance.
Where it fits badly
- Money you might need on any given day. An early exit is a sale at the market price, usually with a fee, and from TreasuryDirect it needs a transfer after a 45-day hold that a 4-week bill never clears. Where to keep an emergency fund keeps money you might need this week in insured savings, and bills, if at all, in the back portion of a large fund.
- Savers in a state with no income tax. The exemption adds nothing; the comparison is yield against yield after federal tax.
- Anyone who wants to know the rate before committing at auction. A non-competitive bid takes whatever the auction sets.
- Anyone who wants income along the way. A bill pays nothing until it matures.
- Anyone who wants a rate held for years. The longest regular bill runs 52 weeks; money rolled into a new bill gets whatever the next auction sets, higher or lower.
More on Treasury bills
Are Treasury bills taxable? sets out the federal and state rules, when the discount is reported as income and where it appears on Form 1099-INT.
How to buy Treasury bills compares the three routes, TreasuryDirect, a brokerage and a bank, and follows your cash from the order to maturity.
Building a Treasury bill ladder shows how to set one up and keep it running.
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