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You can buy Treasury bills through a brokerage account either by placing an order for a new bill at auction or by buying an already-issued bill in the secondary market. For an auction order, most individual investors use a noncompetitive bid: choose an amount and accept the rate set at auction. For a secondary-market purchase, compare the live price, yield, maturity date, minimum, and any charges shown by your broker before submitting.
What you are buying
Treasury bills are short-term U.S. government securities issued electronically in terms of 4, 6, 8, 13, 17, 26, and 52 weeks. Shorter-term bills are generally auctioned weekly; 52-week bills are generally auctioned every four weeks. The Treasury’s Treasury Bills page and current auction calendar and offering announcement provide the current terms and dates.
Bills are sold at a discount or at face value. At maturity, Treasury pays the bill’s face value; for a discounted bill, the difference between what you paid and face value is your return. Treasury lists a $100 minimum purchase in $100 increments, but a broker may offer different order sizes or impose its own requirements, so check the order screen.
Treasury’s general tax summary says interest on bills is subject to federal tax and exempt from state and local taxes. Individual circumstances can affect tax reporting; consult current IRS guidance or a tax professional if you need advice for your situation.
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Choose between an auction and the secondary market
| What to compare | New-issue auction | Secondary-market bill |
|---|---|---|
| When price or rate is known | The final discount rate is determined through the auction, so it is not known when you place the order. | The broker displays a current price and yield for an outstanding bill; these can change with the market. |
| Maturity | The bill’s term and maturity date are tied to the scheduled offering. | Choose from the outstanding bills available; compare each maturity date and remaining term. |
| Order amount and minimum | Treasury lists a $100 minimum and $100 increments; verify the broker’s order sizes. | Check the broker’s displayed minimum and available quantity for the specific listing. |
| Security selection | You choose an offering and term; the final security is issued through the auction. | You can compare listed securities and select a specific bill or maturity when available. |
| Cost details | Check the broker’s charges and whether an assisted order costs more. | Review the quote, yield, order conditions, and any stated transaction or assisted-service charges. |
Treasury says marketable securities can be bought through a bank, broker, or dealer, and outstanding bills may be traded before maturity. See Treasury’s guidance on bill terms and trading and its marketable securities information. Broker interfaces and offerings vary.
How to place a Treasury bill order at auction
- Open an account that supports individual Treasury securities. Sign in and look for a section labeled something like “Fixed Income,” “Bonds,” “New Issues,” or “Treasury Auctions.” These are common navigation terms, not universal menu labels.
- Find the bill offering. Select the term you want and compare the broker’s auction listing with the current Treasury auction calendar and offering announcement. Confirm the auction, issue, and maturity dates.
- Choose the bid type. For a noncompetitive bid, enter an amount and accept the auction-determined rate. For a competitive bid, specify the discount rate you are willing to accept; the bid may be awarded in full, partly, or not at all. You cannot submit both types of bid in the same auction. Treasury’s bill guidance lists a $10 million maximum noncompetitive bill purchase per auction, while broker order limits and procedures may differ. The usual straightforward choice for an individual investor seeking a specified amount is noncompetitive bidding.
- Review the order before submitting. Check the term, security identifier or CUSIP if displayed, auction and maturity dates, amount, funding source, bid type, and the broker’s order deadline. Read the broker’s disclosures for when funds are reserved or debited; these operational details are provider-specific.
- Check the fee and execution channel. Online and representative-assisted orders may have different charges. For example, Charles Schwab lists $0 for online Treasury auction and secondary trades and $25 for broker-assisted trades on its Fixed Income Pricing page. Fidelity lists $0 for online Treasury auctions and secondary issues and a $19.95 representative-assisted Treasury auction charge on its Trading Commissions and Margin Rates page. These are the respective brokers’ published prices, not industry-wide rates; verify current pricing and account terms before trading.
- Submit and monitor the order. Follow the broker’s confirmation screen and later check the account for the auction result and final transaction details. The final auction rate is not set when you enter the order.
How to buy an outstanding bill
- Open the broker’s fixed-income or Treasury listings. Navigate to the area for secondary-market securities, not new issues or auctions.
- Compare the available bills. Review each security’s maturity date, price, yield, order minimum or quantity, and any stated transaction or representative-assisted charge. The secondary-market price is not necessarily the original auction price.
- Decide whether the remaining term suits your plan. An outstanding bill may mature sooner than a newly auctioned bill, so compare its remaining time to maturity rather than relying on the original term label alone.
- Review the quote and order conditions immediately before submitting. Confirm the security identifier, quantity, displayed yield and price, funding details, and broker charges. Market quotes can move before an order is executed.
What to know about bid types
Noncompetitive bids
You specify how much you want to buy and agree to accept the rate determined by the auction. Treasury says compliant noncompetitive bids are awarded in full up to the applicable limit. TreasuryDirect’s stated maximum for a noncompetitive bill purchase is $10 million per auction; brokerage rules and available order sizes should be checked with the broker.
Competitive bids
You specify the discount rate you are willing to accept. If the auction result is less favorable than your specified rate, your bid may be rejected; it can also be partially or fully awarded. Competitive bids must be placed through a broker, bank, or dealer; TreasuryDirect accepts only noncompetitive bids. Because the award is uncertain, competitive bidding is not the simple route for an investor who wants a particular amount.
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At maturity, Treasury pays the bill’s face value. If you sell before maturity, you receive the market price available at the time, which may be higher or lower than your purchase price. Before selling, review your broker’s live quote, yield, order conditions, and any charges; do not assume an early sale will return your original cost or the full face amount.
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For current offering dates, terms, auction mechanics, and Treasury’s general tax summary, use the Treasury Bills page and its linked auction information. Broker order screens, deadlines, fees, and funding practices are specific to the provider and can change.
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Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
