Here is the short version. To buy a Treasury bill directly from the government, open an account at TreasuryDirect, link a bank account, pick a term, and place a noncompetitive bid before the auction closes. To buy one through a brokerage, log into the account you already have, open the bond or fixed-income section, and either bid at the next auction or buy an existing bill on the secondary market. Both routes get you the same security. What differs is how easy it is to get your money out early and how much clicking it takes to keep rolling bills over.
Buying through TreasuryDirect, step by step
- Open an account. You need a Social Security number, a U.S. address, an email address and a checking or savings account for funding. Setup takes a few minutes, though some new accounts are asked for extra identity verification.
- Go to BuyDirect and choose “Bills.” You’ll see the available terms and the upcoming auction dates.
- Pick a term. As of 2026, Treasury sells bills in 4-, 6-, 8-, 13-, 17-, 26- and 52-week maturities, according to TreasuryDirect. The shorter terms are auctioned weekly; the 52-week bill comes up every four weeks.
- Enter the amount. The minimum is $100, and you buy in $100 increments. That amount is the face value, meaning what you get back at maturity.
- Decide on reinvestment. You can schedule the bill to roll into a new one automatically when it matures, a set number of times.
- Submit before the cutoff. Bids close on the morning of auction day, so give yourself a day or two of cushion rather than cutting it close.
On issue day, Treasury pulls the purchase price from your bank, which will be less than the face value. At maturity, the full face value lands back in your TreasuryDirect account or your linked bank. The gap between the two is your interest.
Buying through a brokerage, step by step
- Find the Treasury section. Most large brokerages list “new issue” Treasuries (upcoming auctions) separately from “secondary” Treasuries (bills already trading).
- Choose new issue or secondary. A new-issue order gets you the auction price, the same one TreasuryDirect buyers get. A secondary purchase lets you pick an exact maturity date, including odd ones like 11 weeks out.
- Enter a quantity. Brokers usually quote bills in $1,000 face-value units, even though Treasury’s own minimum is $100.
- Check for fees. Many brokers charge nothing for online Treasury trades, but some charge for phone orders or secondary trades. Read the commission schedule before you click.
- Set up an auto-roll if you want one. Several brokers will reinvest a maturing bill into the next auction without you doing anything.
How a discount bill pays you
T-bills don’t send interest checks. You buy below face value and collect the full face value later. Take a hypothetical 26-week bill with a $10,000 face value that sells at auction for $9,800. You pay $9,800 now and receive $10,000 in about six months. The $200 difference is interest, which works out to roughly a 4% annualized return on what you put in. Real auction prices change every week, so treat those numbers as an illustration only.
Your bid is almost always noncompetitive. That means you agree to accept whatever rate the auction sets, and in exchange you’re guaranteed to get the bill. Competitive bids, where you name a rate, are mostly a tool for institutions.
Where the two routes really split
| Feature | TreasuryDirect | Brokerage |
|---|---|---|
| Minimum purchase | $100 | Usually $1,000 |
| Buy at auction | Yes | Yes |
| Buy existing bills | No | Yes |
| Sell before maturity | Only after transferring out to a broker | Yes, any trading day |
| Proceeds at maturity | To your linked bank or TreasuryDirect balance | Into your brokerage cash, ready to reinvest |
| Website experience | Functional but dated | Usually smoother |
The row that matters most is selling early. TreasuryDirect can’t sell anything for you. You’d have to transfer the bill to a bank or broker first, and newly issued securities generally have to sit in TreasuryDirect for 45 days before they can be transferred at all. A 4-week bill bought there can’t be moved, because it matures before the holding period ends. If there’s any chance you’ll need the money before maturity, a brokerage account gives you an exit that TreasuryDirect doesn’t.
In practice, selling early is rarely a big loss with bills. Their maturities are so short that price swings stay small. Still, “small” isn’t zero, and you’d be selling at whatever the market bids that day.
Taxes on T-bill interest
Interest on Treasury bills is subject to federal income tax but exempt from state and local income tax. If you live in a high-tax state, that exemption can make a bill’s yield more competitive than a bank account or CD paying a similar headline rate, since bank interest is taxed at every level. You’ll get a Form 1099-INT for the year the bill matures, not the year you bought it, so a 52-week bill bought in March counts as income for the following year.
Frequently asked questions
Are T-bills safer than a bank account?
They carry a different kind of guarantee. Bills are backed by the full faith and credit of the U.S. government with no dollar cap. Bank deposits are protected by FDIC insurance up to $250,000 per depositor, per insured bank, per ownership category. For most balances, both are about as safe as cash gets.
Can I hold T-bills in an IRA?
Yes, but not at TreasuryDirect, which doesn’t offer retirement accounts. You’d buy them inside an IRA held at a brokerage. In that case the state-tax exemption no longer matters, because IRA growth isn’t taxed year to year anyway.
What happens if the auction rate drops after I bid?
Nothing you can change. A noncompetitive bid locks in the rate the auction produces, which you won’t know until results are announced. Once the bill is issued, your return to maturity is fixed regardless of what rates do afterward.
Is there a limit on how much I can buy?
A single noncompetitive bid can be as large as $10 million per auction. That ceiling won’t matter to most savers.
Is a T-bill right for your cash?
Bills fit money with a known date attached: a tax payment due in April, tuition next semester, a down payment you expect to make in six months. You know the payout and the date, and in most states you keep more of the interest than a bank would leave you.
They fit less well for an emergency fund you might tap tomorrow. A savings account moves money in a day, while a bill held at TreasuryDirect can lock you in until maturity. Our comparison of high-yield savings and CDs covers where those accounts beat bills, and if you’re still building a cushion, which should come first is worth reading before you lock anything up.
A reasonable middle path for many people: keep a few weeks of expenses in savings, and put cash earmarked for a specific bill, months away, into a T-bill ladder that matures just before it’s due.
