Treasury bills (T-bills) are short-term US government debt that matures in 4, 6, 8, 13, 17, 26 or 52 weeks. A bill pays no coupon: you buy it for less than its face value, get the full face value back at maturity, and the difference is your interest.
The 13-week bill, the 3-month benchmark, last auctioned at a 4.060% discount rate on . The latest rate for every bill:
| BILL | HIGH RATE | AUCTION | SCHEDULE |
|---|---|---|---|
| 4-week bill | 3.890% | Weekly, usually Thursday | |
| 6-week bill | 3.990% | Weekly, usually Tuesday | |
| 8-week bill | 3.975% | Weekly, usually Thursday | |
| 13-week bill | 4.060% | Weekly, usually Monday | |
| 17-week bill | 4.090% | Weekly, usually Wednesday | |
| 26-week bill | 4.145% | Weekly, usually Monday | |
| 52-week bill | 4.290% | Every 4 weeks, usually Tuesday |
Treasury sells every bill at auction each week, except the 52-week bill, which is auctioned every four weeks. Each auction is announced a few days ahead and the bills are issued a few days after it. Banks, dealers and funds set the rate with competitive bids. Most individual buyers send a non-competitive bid instead, which accepts whatever rate the auction sets. Helious publishes the latest rate and the usual auction day for every bill, and each bill's own page has its full auction history, bid-to-cover and bidder split.
A bill auction is quoted as a discount rate: the discount from face value, as an annual rate on a 360-day year. The investment yield, also called the coupon-equivalent or bond-equivalent yield, is the return on the price you actually pay, on a 365-day year. It is always a little higher than the discount rate, and it is the figure to compare with a CD, a savings account or a Treasury note.
A live example: at its auction on the 13-week bill sold at a 4.060% discount rate. Over its 91 days that is a price of about $98.97 per $100 of face value, and an investment yield of about 4.16%.
There are two routes. In a TreasuryDirect account, which the Treasury runs, you place a non-competitive bid before an auction and accept the rate it sets. In a bank or brokerage account you can bid at auction the same way, or buy bills that already trade in the secondary market at the going price. Bills are sold in $100 steps from a $100 minimum, and a non-competitive bid can be up to $10 million per auction. The interest is subject to federal income tax and exempt from state and local income tax.
Bill rates sit close to the fed funds rate and move with what the market expects from the next few Fed decisions, so the strip from 4 to 52 weeks reads as the near-term rate path at auction prices.
