Treasury Bills: Rates & Terms
Treasury bills are offered in multiples of $100 and in terms ranging from a few days to 52 weeks.
Price and Interest
Bills are typically sold at a discount from the par amount (also called face value). The price of a bill is competitively determined at auction. Using a single $100 investment as an example, a $100 bill may be auctioned for $98. You would pay $98 for the bill at purchase and you would get $100 when the bill matures. The difference of $2 is your interest. Unlike Treasury Notes, Treasury Bonds, and Treasury Inflation-Protected Securities [TIPS], bills don't pay interest every six months.
It is possible for a bill auction to result in a price equal to par, which means that Treasury will issue and redeem the securities at par value.
Treasury calculates auction results to the sixth decimal place. In determining the particular dollar amount an investor will pay, Treasury rounds to the nearest penny using conventional mathematical rounding methods
Options at Maturity - and Before
You can hold a bill until it matures or sell it before it matures.
If you don't sell, here are your options at maturity:
- TreasuryDirect. Redeem the bill or use its principal to buy another security.
- Legacy Treasury Direct. Redeem the bill or reinvest its principal into another bill.
- Bank or Broker. For your options, consult your bank or broker.
Auction Pattern
Cash Management Bill - Variable
4-Week Bill - Weekly
13-Week Bill - Weekly
26-Week Bill - Weekly
52-Week Bill – Every four weeks
