How to build a T-bill ladder, with 4-rung and 13-rung examples

A T-bill ladder keeps cash earning Treasury bill rates while part of it comes back on a schedule you choose: every week, every four weeks or every quarter. Below are two complete ladders, a 4-rung and a 13-rung, with week-by-week cash flows at the rates Treasury published for October 30, 2026, followed by the rollover rules at TreasuryDirect and at brokers and the yield you give up for frequent access. To rerun any of the numbers at today's rates, use the Treasury bill calculator, and for every other way to hold Treasuries see the US Treasuries hub.

What is a T-bill ladder?

A T-bill ladder is a set of Treasury bills, bought in equal amounts, that mature at regular intervals so cash comes due on a predictable schedule. Each bill is a rung. Three choices define the ladder: the size of each rung, the term of the bills (from 4 to 52 weeks) and the spacing between maturities. When a rung matures, Treasury pays its face value and you decide whether to spend the money or buy a new bill at that week's auction rate. Because the replacement always goes on the far end, the ladder keeps its shape for as long as you keep rolling.

Bills are sold at a discount, repaid at face value and backed by the full faith and credit of the US government; if pricing is new to you, start with what a Treasury bill is. Treasury sells bills from $100, in $100 increments, so rung size is flexible: four rungs of $500 work as well as four rungs of $50,000. The same structure built from bank deposits is a CD ladder. The practical differences are that bill interest is exempt from state income tax and that a bill held at a broker can be sold before it matures, while a CD usually charges an early-withdrawal penalty.

How do you build a 4-rung T-bill ladder?

The quickest 4-rung ladder buys one 4-week bill a week for four weeks, after which one rung matures every week. With $40,000, each rung is $10,000 of face value. Treasury auctions 4-week bills on Thursdays and issues them the following Tuesday, so every purchase and every maturity in this ladder lands on a Tuesday.

At the 3.91% discount rate Treasury reported for 4-week bills on October 30, 2026, a $10,000 bill costs $10,000 × (1 − 0.0391 × 28 ÷ 360) = $9,969.59 and pays $30.41 of interest at maturity. The table assumes that rate holds and that every maturing rung is rolled into a new 4-week bill. A roll hands you the gap between the $10,000 you receive and the price of the replacement, which is why the net cash column turns positive from week 5.

From week 5 the pattern repeats. A full year holds 52 maturities, so at an unchanged rate the ladder pays 52 × $30.41 = $1,581.32 on $39,878.36 of cash, close to 3.97%. On any Tuesday you need money, you skip that week's roll and take the full $10,000; the other three rungs keep earning.

The weak spot is the time between maturities. TreasuryDirect makes you hold a newly bought security for 45 calendar days before you can transfer or sell it, and a 4-week bill matures before that hold ends, so a 4-week rung in TreasuryDirect can only ever be cashed at maturity. At a broker you can sell a rung on any trading day, at the bid price.

How does a 13-rung T-bill ladder work?

A 13-rung ladder buys a 13-week bill every week for 13 weeks, then one rung matures every Thursday while earning the 13-week rate instead of the 4-week rate. Thirteen-week bills are auctioned on Mondays and issued on Thursdays, the same weekday older 13-week bills mature, so a rolled rung is replaced on the day it pays off. With $5,000 per rung ($65,000 in total) and the October 30, 2026 discount rate of 3.99%, each rung costs $5,000 × (1 − 0.0399 × 91 ÷ 360) = $4,949.57 and pays $50.43 when it matures.

Once complete, each rung matures four times a year, so the ladder pays 13 × 4 × $50.43 = $2,622.36 a year at an unchanged rate, roughly 4.08% on the cash tied up. Building it at auction takes 13 weeks. At a broker you can build it in a single day by buying bills already trading in the secondary market that mature one week apart, though their yields will differ slightly from the auction rate.

Holidays shift the calendar by a day. When a Thursday is a federal holiday, that week's 13-week bills issue and mature on the Friday: Treasury's auction data shows the 13-week bills that would otherwise come due on Thanksgiving, November 26, 2026, are scheduled to mature on Friday, November 27.

How do rollovers work at TreasuryDirect and at a broker?

At TreasuryDirect a rollover is a scheduled reinvestment into a new bill of the same term; at a broker it is usually an auto-roll setting. The details decide how much attention a ladder needs.

Rolling rungs in TreasuryDirect

• Limits. You can schedule reinvestments when you buy a bill or later, up to 25 for 4-week bills, 16 for 6-week, 10 for 8-week, 7 for 13-week, 6 for 17-week, 3 for 26-week and 1 for 52-week. That is about two years on autopilot: a 13-week rung with 7 reinvestments runs for 8 cycles, or 104 weeks, before you have to set it up again.
• Same term only. A maturing 13-week bill can only become another 13-week bill. To change a rung's term, let it pay out and buy the new term as a fresh purchase.
• Interest is paid out, not compounded. The reinvestment buys the same face value, and the difference between the maturing bill's face value and the new bill's price goes to your bank account, as IRS Publication 550 describes. To compound, you would buy extra bills with that money as separate purchases, each subject to the 45-day hold.
• Deadline. You cannot schedule, change or cancel a reinvestment after four business days before the auction of the new security. If you want a rung's cash, cancel its roll before that point.
• Cancellation. Under Treasury's rules, if no bill of the same term is issued on the maturity date, the reinvestment is canceled and the money is paid to you instead.
• Sign-in. Signing in now requires an ID.me account, the only way to sign in since October 28, 2026. TreasuryDirect says scheduled reinvestments still process without it, but you cannot view, edit or cancel them until it is set up.

Rolling rungs at a broker

Brokers that sell new-issue bills generally offer an automatic roll: before your bill matures, the broker places a noncompetitive bid for a new bill of the same term at the next auction and pays for it from the maturing proceeds. Check three things before relying on it: whether the broker rolls the full proceeds or the same face value, where any leftover cash sits and what it earns, and how early its order cutoff is, because brokers close orders before Treasury's own deadline. What happens on the maturity date itself, including when cash lands and how holidays move it, is covered in what happens when a T-bill matures.

What does a ladder cost in yield compared with one longer bill?

At October 30, 2026 rates, weekly access cost about 0.28 points with 13-week rungs and 0.38 points with 4-week rungs, compared with one 52-week bill. Bill yields rose with term that day, from a 3.98% investment yield on 4-week bills to 4.36% on 52-week bills, so the shorter the rung, the more yield you surrender.

The investment yield is the annualized return on the price you pay; its formula, and why it always runs above the discount rate, is explained in discount rate vs investment rate. The dollar column simply multiplies $65,000 by each yield, which ignores compounding but is close enough to compare designs.

Two points stand out. First, the shortfall comes from the term of the rungs, not from laddering as such. A ladder of 52-week bills, one bought at each four-weekly auction, earns the 52-week rate once all 13 rungs are in place and still returns cash every four weeks. Its cost is the build: 48 weeks during which the unladdered money earns shorter-bill rates, plus a yearly chore, since TreasuryDirect allows only one scheduled reinvestment on a 52-week bill. Second, the table freezes rates. If bill yields rise, short rungs reprice within weeks and can overtake the long bill; if yields fall, the 52-week buyer keeps 4.36% while the ladder reinvests lower.

How do you choose the rung size, term and spacing?

Start from the dates you will need money, then pick the shortest spacing you will actually use and the longest bill term that still fits it. A ladder that matures every week but is only tapped twice a year gives up yield for access nobody uses.

The live table below shows today's discount rate and investment yield for every bill term, with the change over a month and a year. Read across the investment-yield column to see how much extra each longer term pays, and use the change columns to see whether short rates have been rising or falling, the main swing factor for a ladder of short rungs. All seven terms and how they differ are laid out in T-bill terms compared.

How to set up a T-bill ladder, step by step

1. Set the rung size and spacing

   Divide the money by the number of rungs, then write down the maturity dates you want. A $26,000 reserve with weekly access on 13-week bills means 13 rungs of $2,000.

2. Choose where to hold the ladder

   Open or sign in to a TreasuryDirect account, or use a brokerage account that sells new-issue Treasury bills. The TreasuryDirect account guide covers setup and bank linking.

3. Buy the first rung at the next auction

   Place a noncompetitive bid for the first rung. You receive the rate set at that auction, which is explained in how Treasury auctions work. Keep enough money in the linked bank account to pay on the issue date.

4. Add one rung per interval

   Buy the next rung at each following auction until the ladder is complete. At a broker you can instead buy secondary-market bills that already mature on your chosen dates.

5. Turn on rolling

   Schedule reinvestments for each rung in TreasuryDirect, up to the limit for its term, or switch on auto-roll at your broker. Note each rung's reinvestment cutoff in a calendar.

6. Review every maturity

   When a rung comes due, decide to spend or roll, keep a record for your tax return and reschedule reinvestments before they run out.

What are the risks of a T-bill ladder?

A ladder removes most price risk but keeps reinvestment, inflation, liquidity and operational risk, and each maturity adds to your federal taxable income. Treasury bills carry the full faith and credit of the US government, so the risks below are about timing, rates and access rather than repayment; the wider picture is in are Treasuries risk-free.

• Reinvestment risk. Bill yields follow the Federal Reserve's policy rate closely. With the federal funds target at 3.75% to 4.00% after the October 28, 2026 meeting, any cut would reach each rung at its next roll; how Fed decisions move bill rates shows how quickly.
• Inflation risk. The Bureau of Labor Statistics reported consumer prices up 3.7% in the 12 months to September 2026, close to the 3.98% to 4.36% bill yields above, so the ladder's return after inflation was thin. See real returns and inflation.
• Liquidity risk. Between maturities, money in TreasuryDirect is hard to reach: the 45-day hold applies and transfers to a broker take paperwork. At a broker you can sell, but at the bid; selling Treasuries before maturity works through the costs.
• Operational risk. A missed reinvestment cutoff, a canceled roll, an outdated linked bank account or a lapsed sign-in can leave a rung's cash idle or arriving somewhere you did not expect.
• Schedule risk. Treasury notes that its financing needs, policy decisions and Congressional action on the debt limit can change the auction pattern, which a tightly timed ladder depends on.
• Tax drag. Every maturity is federal taxable income in its year, even when rolled, so a weekly ladder produces dozens of small taxable events a year. Holding the ladder in a retirement account changes that; see T-bills in an IRA.

A ladder is one of several ways to park cash; the Learn home page maps the rest, from savings accounts to money market funds.