Treasury bills: how T-bills are bought, paid and taxed
A Treasury bill is a loan of 4 to 52 weeks to the U.S. government, bought below face value and repaid at face value. It pays no coupon; the discount is the interest.
4-week bill, auction of October 15, 2026
4.068 %
Investment rate (bond-equivalent yield). You pay $4,984.44 and receive $5,000 on November 17, 2026.
| Discount rate | 4.000 % |
| Price per $100 | 99.688889 |
| Interest at maturity | $15.56 |
| Days to maturity | 28 |
| Issue date | October 20, 2026 |
| Term | Auction | Discount | Investment rate | Price per $100 |
|---|---|---|---|---|
| 4-week | October 15, 2026 | 4.000 % | 4.068 % | 99.688889 |
| 6-week | October 13, 2026 | 3.980 % | 4.055 % | 99.524611 |
| 8-week | October 15, 2026 | 4.050 % | 4.132 % | 99.37 |
| 13-week | October 13, 2026 | 4.085 % | 4.185 % | 98.967403 |
| 17-week | October 14, 2026 | 4.195 % | 4.313 % | 98.613319 |
| 26-week | October 13, 2026 | 4.200 % | 4.351 % | 97.876667 |
| 52-week | September 29, 2026 | 4.400 % | 4.616 % | 95.551111 |
Worked out by Radif Partners · How we calculate · rates read on treasurydirect.gov and fiscaldata.treasury.gov · not personal financial advice
A Treasury bill is the shortest security the U.S. Treasury sells: terms of 4, 6, 8, 13, 17, 26, 52 weeks, sold at auction at a price below its face value and repaid at face value on the maturity date. The difference is the interest. You can buy from $100 in multiples of $100, up to $10,000,000 per auction with a noncompetitive bid, either in a TreasuryDirect account or through a bank or broker. At the auction of October 15, 2026, $5,000 of 4-week bills cost $4,984.44, for $15.56 of interest and an investment rate of 4.068 %; a 26-week bill paid 4.351 % and a 52-week bill 4.616 %. The rate is fixed for the term but each new purchase takes the rate of its own auction. Interest is subject to federal income tax in the year the bill matures and exempt from state and local income tax.
Discount, face value and maturity
A bill has no interest payments. You pay a price below $100 per $100 of face value at the auction, and the Treasury pays the full face value at maturity (TreasuryDirect, Treasury bills). The price comes from the discount rate set at auction: price = 100 × (1 − discount rate × days ÷ 360). For the 4-week bill of October 15, 2026, a discount rate of 4.000 % over 28 days gave a price of 99.688889. Bills are issued only in electronic form and settle on the issue date, usually a few days after the auction: that bill was issued on October 20, 2026 and matures on November 17, 2026.
What a bill costs at the latest auction
17-week bill, auction of October 14, 2026
4.313 %
| Discount rate | 4.195 % |
| Price per $100 | 98.613319 |
| Interest at maturity | $27.73 |
| Days to maturity | 119 |
The auction calendar
The Treasury auctions the 4, 6, 8, 13, 17 and 26-week bills every week and the 52-week bill every four weeks. Each auction is announced a few days ahead with the amount offered, and the result, one rate for the whole issue, is published the same day. The T-bill rates page lists the latest result of each term and the auctions already announced; the rate history shows a year of results.
Buying in TreasuryDirect or through a broker
In TreasuryDirect you place a noncompetitive bid: an amount, no rate. Your bid is filled in full at the rate the auction sets, up to $10,000,000. The money is taken from your bank account on the issue date. You can schedule a purchase before the auction and choose to reinvest automatically at maturity, which buys a new bill of the same term with the face value.
A bank or broker can place the same noncompetitive bid at auction for you, or buy bills already issued on the secondary market at the day's price. Bills held at a broker can be sold before maturity at any time the market is open; bills in TreasuryDirect cannot be sold there and must first be transferred out.
One purchase from start to finish
Take the latest 26-week bill. The auction was held on October 13, 2026; a buyer in TreasuryDirect had to place the order before the noncompetitive deadline of that day, without knowing the rate. After the close the result was published: an investment rate of 4.351 % and a price of 97.876667 per $100. On the issue date, October 15, 2026, $9,787.67 left the buyer's bank account for $10,000 of face value. On April 15, 2027 the $10,000 comes back, unless reinvestment was chosen. Nothing happens in between: no interest is credited, and the account shows the bill at its face value. If the maturity date falls in the next calendar year, so does the tax on the interest.
Interest in dollars over a year
Rolling 4-week bills back to back means 13 purchases a year, each at its own auction rate. If every auction matched the latest one, $5,000 would earn about $202.28 in a year. A single 52-week bill at 4.616 % would earn $222.44 on the same face value, with one rate locked for the year and no reinvestment work. The T-bill calculator gives the exact price and yield for any rate and term.
Tax
For federal tax, the discount is interest, taxable in the year the bill matures or is sold. In a 22 % federal bracket, $15.56 of interest costs $3.42. States and localities cannot tax it (31 U.S.C. 3124): on a state return the interest is subtracted from income, usually on a line for interest on U.S. obligations. A bill bought in one year and repaid in the next moves the interest into the next year's return. The state tax page shows what the exemption is worth in each state, and the comparison with a CD turns it into a single number for your income.
Bills, notes and savings bonds
Bills are the short end of the Treasury's marketable securities: notes run from 2 to 10 years and pay interest every six months, bonds run 20 or 30 years. Savings bonds are a separate family: they are not marketable, cannot be sold to anyone else, and earn a rate set by formula rather than at auction. Their rules are on the I bonds page and the EE bonds page.