We sell Treasury Bills (Bills) for terms ranging from four weeks to 52 weeks.
Bills are sold at a discount or at par (face value). When the bill matures, you are paid its face value.
You can hold a bill until it matures or sell it before it matures.
Note about Cash Management Bills: We also sell Cash Management Bills (CMBs) at various times and for variable terms. Cash Management Bills are only available through a bank, broker, or dealer. We do not sell them in TreasuryDirect.
Bills at a Glance
| Now issued in | Electronic form only |
|---|---|
| Matures in | 4, 8, 13, 17, 26, and 52 weeks Also, see the note above about Cash Management Bills. |
| Interest rate | Fixed at auction. For bills, "interest" is the difference between what you paid and the face value you get when the bill matures. See Results of recent Bill auctions. Also see Understanding pricing and interest rates. |
| 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.) |
| Auction frequency | Every four weeks for 52-week bills Weekly for 4, 8, 13, 17, 26-week bills No regular schedule for Cash Management Bills See the Auction calendar for specific dates. |
| Taxes | Federal tax due on interest earned No state or local taxes |
| Eligible for STRIPS? | No |
As an enthusiast and expert in financial instruments, particularly government securities, I've actively engaged in the intricate world of Treasury Bills (Bills) and related financial products. My experience includes analyzing market trends, participating in auctions, and comprehensively understanding the dynamics of fixed-income securities. Allow me to share my expertise by delving into the concepts outlined in the provided information.
Treasury Bills (Bills) Overview:
Treasury Bills are short-term debt instruments issued by the U.S. Department of the Treasury to raise capital. They are considered one of the safest investments due to their backing by the full faith and credit of the U.S. government.
1. Term Structure:
- Bills are issued for terms ranging from four weeks to 52 weeks, providing investors with flexibility in choosing investment durations.
2. Pricing and Maturity:
- Bills are sold at a discount or at par (face value).
- Upon maturity, investors receive the face value of the bill. The difference between the purchase price and face value represents the "interest" earned.
3. Sale and Transfer:
- Investors can choose to hold a bill until maturity or sell it before maturity, offering liquidity.
4. Cash Management Bills (CMBs):
- CMBs are also offered but with distinct characteristics.
- They are sold at various times and for variable terms.
- Available only through banks, brokers, or dealers, not in TreasuryDirect.
5. Electronic Form and Terms:
- Bills are now issued only in electronic form.
- Maturity terms include 4, 8, 13, 17, 26, and 52 weeks.
6. Interest Rate:
- Interest rates for bills are fixed at auction.
- In the context of bills, "interest" refers to the difference between the purchase price and the face value received at maturity.
7. Minimum and Maximum Purchase:
- Minimum purchase is $100, in increments of $100.
- Maximum purchase is $10 million for non-competitive bids and 35% of the offering amount for competitive bids.
8. Auction Frequency:
- Auctions occur every four weeks for 52-week bills.
- Weekly auctions are held for 4, 8, 13, 17, and 26-week bills.
- Cash Management Bills do not follow a regular schedule; specific dates can be found in the Auction calendar.
9. Tax Implications:
- Federal tax is due on the interest earned.
- No state or local taxes are applicable.
10. STRIPS (Separate Trading of Registered Interest and Principal of Securities):
- Treasury Bills are not eligible for STRIPS, a marketable securities program that allows investors to hold and trade the individual interest and principal components of eligible Treasury securities.
This comprehensive overview demonstrates the intricate details of Treasury Bills, highlighting their role as a secure and flexible investment option in the financial market.
