A Treasury bill, or T-bill, is the shortest debt the US government sells. The Treasury borrows for a fixed number of weeks, never more than 52, and repays one round sum on a set date; buyers pay less than that sum up front, and the gap is their interest. What follows traces one bill from announcement to payout using the Treasury's own rules and auction records. For the wider family of Treasury securities, start at the Treasuries hub.
How does a Treasury bill work?
You pay less than face value for a bill, and the Treasury repays the full face value on the maturity date, 4 to 52 weeks later. Nothing is paid in between. A bill has no coupon, so the whole return arrives at maturity, and TreasuryDirect defines a bill's interest exactly that way: the difference between what you paid and the face value you receive when it matures.
Every bill passes through four dates: the announcement, which fixes the amount and the other three dates; the auction, which sets the price; the issue date, when the bill lands in the buyer's account and the money is collected; and the maturity date, when the Treasury pays the face value to whoever holds the bill by then.
The price comes from a discount rate set at the auction: face value minus the discount rate multiplied by the share of a 360-day year that the bill runs. Because that rate is measured against face value rather than against the cash you hand over, the yield on your money, called the investment rate, is always a little higher; the discount rate vs investment rate guide works through both formulas.
Bills exist only as electronic records. Treasury stopped issuing paper bills in 1979, so a bill today is an entry in a TreasuryDirect account or on the books of a bank or broker. Bills are also marketable, meaning the owner can sell one to another investor before it matures or move it to another account. That sets them apart from I bonds and other savings bonds, which are registered to one person and cannot be sold.
Who issues Treasury bills, and why?
The Treasury Department issues bills through its Bureau of the Fiscal Service to cover short gaps between what the government spends and the cash it takes in. Tax receipts arrive in lumps around filing deadlines, while spending goes out every day. Bills let the Treasury borrow for the exact weeks it needs instead of locking in years of debt.
That was the point from the start. The Treasury announced its first bill auction on December 10, 1929, offering $100 million of 90-day bills, and investors bid for $224 million. Afterward, Under Secretary Ogden Mills said the government would now "sell government bills to fit the immediate needs and make the maturities fit into a known time of income, that is, the tax paying dates." Bills have been sold at auction ever since, and noncompetitive bids, the route most individuals use today, were added in 1947.
Bills now carry most of the government's day-to-day borrowing. The Bureau of the Fiscal Service held 440 public auctions in 2024 and issued about $28.5 trillion of marketable securities. Fiscal Data's auction records show that 332 of those auctions were for bills, 57 of them cash management bills, and that bills made up about 85% of the dollars issued. Most of that is refinancing: a 4-week bill has to be replaced 13 times a year. Because each bill is short, the stock outstanding is far smaller than the yearly flow. On September 30, 2026, the Monthly Statement of the Public Debt showed $7.12 trillion of bills out of $31.83 trillion in marketable Treasury debt, about 22%. For gaps of only days or weeks, the Treasury adds cash management bills outside the weekly calendar, sold only through banks, brokers and dealers; the guide to Treasury auctions covers them.
What terms and limits do T-bills have?
Treasury sells bills in terms of 4, 6, 8, 13, 17, 26 and 52 weeks, with a minimum purchase of $100, in $100 increments and a cap of $10 million per auction on each noncompetitive bid.
| Feature | Rule for regular bills |
|---|---|
| Terms | 4, 6, 8, 13, 17, 26 and 52 weeks |
| Minimum purchase | $100, then any multiple of $100 |
| Largest noncompetitive bid | $10 million per auction |
| Largest competitive award | 35% of the offering amount |
| How often sold | Weekly, except the 52-week bill, which is sold every four weeks |
| Day of the week it matures | Tuesday for 4-, 8- and 17-week bills; Thursday for 6-, 13-, 26- and 52-week bills |
| Interest | The discount, received with the face value at maturity |
| Form | Electronic only |
| Taxes | Federal income tax applies; state and local income taxes do not |
| Can be stripped into zero-coupon pieces | No |
A bill's term is named in weeks, but its price is worked out in days. A 13-week bill runs 91 days, a 26-week bill 182 days and a 52-week bill 364 days, which is why two bills sold at the same discount rate cost different amounts. Choosing among the seven terms is mostly a question of when you need the cash back; the T-bill terms comparison sets out the trade-offs, and a T-bill ladder spreads money across several of them.
You can bid noncompetitively or competitively, but not both in the same auction. Noncompetitive bidders accept whatever rate the auction produces and are filled in full; competitive bidders name a rate and can end up with part of their order or none of it. TreasuryDirect takes only noncompetitive bids.
What does a $10,000 Treasury bill cost?
At the October 13, 2026 auction, a $10,000 26-week bill cost $9,787.67 and pays back $10,000 on April 15, 2027, so it earns $212.33. That auction was held on a Tuesday because the Monday was the Columbus Day holiday.
Worked example: $10,000 of the 26-week bill auctioned October 13, 2026
The auction set a high discount rate of 4.200%. The bill was issued on October 15, 2026 and matures on April 15, 2027, 182 days later.
- Price: $10,000 × (1 − 0.042 × 182 ÷ 360) = $10,000 × 0.978767 = $9,787.67
- Interest at maturity: $10,000 − $9,787.67 = $212.33
- Return on the cash paid: $212.33 ÷ $9,787.67 = 2.17% over 182 days
- Annualized on a 365-day year: 2.17% × 365 ÷ 182 = 4.35%, in line with the 4.351% investment rate Treasury published
- How Treasury quotes the result: a price of 97.876667 per $100 of face value
The same arithmetic works at the minimum size, and longer bills come with bigger discounts.
Worked example: $100 of a 13-week bill and $10,000 of a 52-week bill
- 13-week bill auctioned October 13, 2026 at a 4.085% discount rate: the price was 98.967403 per $100, so a $100 bill cost about $98.97 and earns about $1.03 over 91 days.
- 52-week bill auctioned September 29, 2026 at 4.400%: $10,000 × (1 − 0.044 × 364 ÷ 360) = $9,555.11, so it earns $444.89 over 364 days.
- The 52-week bill's investment rate was 4.616%, about 0.22 percentage point above its discount rate, while the 13-week bill's 4.185% investment rate sat 0.10 point above its 4.085% discount rate. The gap widens as the term lengthens.
The table below prices the same $10,000 26-week purchase at the latest 26-week rate in the site's Treasury data feed. Daily bill rates are secondary-market quotes that the New York Fed collects each afternoon, so they drift away from the last auction result; if the feed is unavailable, the table uses an illustrative 4.1% rate and labels it that way.
| Step | Amount | How it is worked out |
|---|---|---|
| Face value | $10,000.00 | Paid back in full at maturity |
| Term | 26 weeks (182 days) | Bills are quoted on a 360-day year |
| Discount rate | 4.110% | the 26-week rate on Oct 30, 2026 |
| Purchase price | $9,792.22 | $10,000 × (1 − 4.110% × 182 ÷ 360) |
| Interest earned | $207.78 | Face value minus purchase price |
| Investment yield | 4.256% | Coupon-equivalent yield on a 365-day year |
Read it from the top. The purchase price is what leaves your bank account on the issue date, the interest is what the bill adds by maturity, and the investment yield is the figure to set beside a savings account's APY or a CD's rate. For any other amount or term, the calculator runs the same arithmetic.
Are Treasury bills backed by the US government?
Yes: Treasury bills are backed by the full faith and credit of the US government, the same pledge that stands behind every Treasury note, bond and savings bond. TreasuryDirect's own summary is that this pledge guarantees interest and principal will be paid on time.
The backing has no dollar ceiling. Bank deposits rely on FDIC insurance, which covers $250,000 per depositor, per insured bank, per ownership category, whereas a $5 million bill carries exactly the same government promise as a $100 one.
The pledge is not the same thing as a top credit rating. Moody's cut the United States one notch to Aa1 from Aaa on May 16, 2025, citing more than a decade of rising debt and interest costs. The downgrade changed nothing about what a bill pays at maturity, and because default is treated as remote, the 3-month bill yield is commonly used as a stand-in for the risk-free rate.
The pledge does not protect a bill's price before maturity, the purchasing power of the dollars you get back or the rate on your next bill; see the risks below and are Treasuries risk-free?
How do T-bills compare with savings accounts and CDs?
A bill locks in a rate like a CD, can be sold before maturity at the market price, and its interest is exempt from state income tax, unlike bank interest.
A high-yield savings account pays a variable rate and lets money leave the same day. A CD fixes the rate but charges whatever early withdrawal penalty its terms set. Both rely on FDIC insurance up to the limit rather than on the government's own promise to pay. A short bill sits in between on access, since it sells for close to its purchase price plus the interest earned so far, and ahead on tax in high-tax states, because its interest is taxed federally but not by states or cities; the T-bill tax guide covers Form 1099-INT and the state exemption. Head-to-head numbers are in T-bills vs CDs, T-bills vs high-yield savings and T-bills vs money market funds, and the guides to CDs and high-yield savings explain how banks set those rates.
Where do you buy Treasury bills?
You can buy new bills at auction through TreasuryDirect or a brokerage, buy existing bills through a broker, or own them indirectly through a fund. TreasuryDirect charges no fees but takes only noncompetitive bids, cannot sell a bill for you and requires an ID.me account, the only way to sign in since October 28, 2026. T-bill ETFs, money market funds and on-chain T-bill funds hold bills for you in exchange for an annual fee. The guide to buying Treasury bills compares the routes, the TreasuryDirect account guide covers opening an account, and readers outside the US should start with can foreigners buy US Treasury bills?
What are the risks of owning a Treasury bill?
The main risks are a lower price if you sell before maturity, inflation that outpaces the yield, and a lower rate when the bill matures and you reinvest.
Interest-rate risk. If rates rise after you buy, a bill sold early fetches less than it otherwise would. Take the 26-week bill from the example. With 91 days left it would be worth $9,893.83 if 13-week bills were trading at a 4.20% discount rate, but $9,881.19 if they had climbed to 4.70%, which is $12.64 less per $10,000 and still above the $9,787.67 paid. Held to maturity, the risk disappears. Longer Treasuries swing far more, as why bond prices fall when rates rise shows, and selling Treasuries before maturity covers the mechanics.
Inflation risk. Consumer prices rose 3.7% in the 12 months to September 2026, according to the Bureau of Labor Statistics, while the 26-week bill yielded 4.25% on October 30, 2026. That leaves a margin of about half a point before tax. After federal tax at a 22% rate the 4.25% shrinks to about 3.3%, below the inflation rate, so the money buys slightly less when it comes back. The real returns guide shows how to run this with your own tax rate.
Reinvestment risk. A bill's rate is fixed only until it matures, and the next one is priced at whatever its auction sets. Bill rates track the Federal Reserve's target range closely; after an increase in September 2026, the Fed held the range at 3.75% to 4.00% on October 28, 2026, and a later cut would lower each rollover. The Fed rate guide explains the link, and what happens when a T-bill matures covers the rollover choices.
Access risk. A bill held in TreasuryDirect cannot be sold there. To sell early you transfer it to a broker, which is allowed only after a hold of 45 calendar days from the issue date, so a 4-week bill bought in TreasuryDirect has to be held to maturity. Since the move to a single identity-verified sign-in, holders who have not completed the check also lose online access until they do, although maturities and scheduled reinvestments keep running.