A Treasury bill’s life is short and simple: you buy it at a discount, wait for it to mature, and receive its full face value. Still, the details of issue dates, terms, maturity and reinvestment matter if you are using bills to manage cash.
Terms and schedules
The Treasury sells bills with terms of a year or less, for example 4, 8, 13, 17, 26 and 52 weeks. Most terms are auctioned every week; the 52-week bill is auctioned every four weeks. The Treasury also sells occasional cash management bills with irregular terms. TreasuryDirect publishes the auction schedule, including each bill’s announcement, auction, issue and maturity dates.
Key dates in a bill’s life
- Announcement: the Treasury announces the offering amount and dates a few days before the auction.
- Auction: bids are accepted. Most individuals place a non-competitive bid, which accepts whatever rate the auction sets.
- Issue date: you pay the price and the bill is issued to you, usually a few days after the auction.
- Maturity date: you receive the face value. If maturity falls on a non-business day, payment is made on the next business day.
Counting days to maturity
A 13-week bill typically has 91 days from issue to maturity, a 26-week bill 182 days and a 52-week bill 364 days. Holidays and schedule adjustments can change the exact count. Yield calculations use the actual number of days, so use the dates on your confirmation for precision. Our Treasury Bill Calculator shows the maturity date when you enter the issue date and the number of days.
What happens at maturity
- In TreasuryDirect: the face value is paid to the bank account linked to your account, unless you have scheduled a reinvestment.
- At a broker: the face value is credited to your brokerage account as cash.
Because the bill was bought at a discount, the amount you receive at maturity includes your interest. Nothing is paid before maturity.
Reinvesting (“rolling”) bills
Many investors automatically reinvest a maturing bill into a new bill of the same term. TreasuryDirect lets you schedule reinvestments when you buy, and many brokers offer an auto-roll feature. Each new bill is bought at that week’s auction rate, so your rate changes with each roll. Rolling short bills keeps your money flexible but exposes you to falling rates; buying a longer bill locks in a rate for longer.
Selling before maturity
Bills held at a broker can usually be sold on the secondary market before they mature. You will receive the market price on the day you sell, which depends on current rates and may include a small trading cost. Bills held in TreasuryDirect cannot be sold there; they must first be transferred to a broker.
Taxes at maturity
The difference between what you paid and the face value is interest income. It is subject to federal income tax and exempt from state and local income tax. It is generally reported for the year in which the bill matures or is sold. TreasuryDirect and brokers issue tax forms; check IRS guidance or a tax professional for your situation.
A simple timeline example
You buy a $10,000, 26-week bill for $9,800 at auction. It is issued on a Thursday and matures 182 days later. On the maturity date you receive $10,000. Your $200 of interest is reported as income for that year. If you had scheduled one reinvestment, the $10,000 would instead buy a new 26-week bill at that week’s rate. (Illustrative numbers only.)