How to Buy Treasury Bills (2026): TreasuryDirect vs a Brokerage vs T-Bill ETFs, Step by Step
A Treasury bill is a short-term US government IOU that matures in 4 to 52 weeks. You buy it at a discount and get the full face value at maturity; the difference is your interest. There are three ways to buy: TreasuryDirect.gov (direct from the government, $100 minimum, no fees), a brokerage account (easier to manage and to sell early), or a T-bill ETF (the simplest, trades like a stock). Interest is taxed federally but is exempt from state and local income tax. For most people who already have a brokerage account, buying there or using an ETF is the easiest route.
What a T-bill is
When the US government needs to borrow for a short time, it sells Treasury bills. You lend it money. It pays you back, with interest, in a few weeks or months.
T-bills come in these terms: 4, 6, 8, 13, 17, 26 and 52 weeks.
They work a little differently from a savings account. There are no interest payments. You buy the bill at a discount and get the full amount at the end.
Example: you buy a $1,000, 26-week bill for $980. Six months later you get $1,000. The $20 difference is your interest.
With the Fed's rate at 3.75% to 4.00% and longer-term yields at multi-decade highs, short-term Treasuries are paying more than they have for most of the past 15 years. You can see current rates on the Federal Reserve's H.15 page or on TreasuryDirect's auction results.
Three ways to buy
| TreasuryDirect | Brokerage | T-bill ETF | |
|---|---|---|---|
| Minimum | $100 | Often $1,000 | One share or less |
| Fees | None | Usually none for new issues | Small annual fee (often 0.03% to 0.15%) |
| Sell before maturity | No (must transfer out first) | Yes | Yes, any trading day |
| Works in an IRA | No | Yes | Yes |
| Ease of use | Clunky | Good | Easiest |
| Auto-reinvest | Yes | At some brokers | Automatic |
Method 1: TreasuryDirect
This is the government's own website. No middleman, no fees.
Set up an account
- Go to TreasuryDirect.gov and choose to open an individual account.
- Enter your Social Security number, address, email and bank account details.
- Set a password and security questions. The site sends a one-time code by email each time you log in.
Buy a bill
- Log in and select BuyDirect.
- Under Marketable Securities, choose Bills.
- Pick the term and auction date.
- Enter the amount (multiples of $100).
- Choose your bank account as the funding source.
- Optionally, schedule reinvestments so the bill rolls over automatically when it matures.
- Review and submit.
Your purchase is a non-competitive bid. That means you accept whatever rate the auction sets, and you're guaranteed to get your bills. The money is pulled from your bank on the issue date, and the face value is deposited back when the bill matures.
When auctions happen
| Term | Auctioned |
|---|---|
| 4-week | Weekly, usually Thursday |
| 13-week and 26-week | Weekly, usually Monday |
| 52-week | Every four weeks, usually Tuesday |
Downsides: the website is dated, you can't hold bills in an IRA, and you can't sell early without transferring to a broker first.
Method 2: Your brokerage account
If you already have an account at a major brokerage, this is usually easier.
- Log in and find the bonds or fixed income section.
- Choose Treasuries, then new issues (or "auctions").
- Select the term you want.
- Enter the quantity. One bond usually means $1,000 of face value.
- Submit before the auction cutoff.
Most large brokers charge no commission for new-issue Treasuries bought online. You can also buy existing bills on the secondary market any day, which is handy if you want a specific maturity date.
Advantages: everything in one place, you can hold them in an IRA, and you can sell before maturity if you need the cash.
Method 3: A T-bill ETF
If the steps above sound like too much, there's a simpler option. A T-bill ETF holds a rolling basket of Treasury bills and trades like a stock.
Well-known examples include iShares 0-3 Month Treasury Bond ETF (SGOV) and SPDR Bloomberg 1-3 Month T-Bill ETF (BIL).
- Buy and sell any trading day
- Pays interest monthly
- No maturity dates to track
- Most of the income keeps its state-tax exemption (your fund reports the percentage each year)
The trade-off is a small annual fee and a price that can wiggle by a few cents.
Which should you pick?
- You have $100 to $1,000 and no brokerage account: TreasuryDirect.
- You already have a brokerage account: buy there.
- You want zero effort or might need the money any day: a T-bill ETF.
- It's inside an IRA: brokerage or ETF.
How T-bills are taxed
- Federal income tax: yes, as interest income.
- State and local income tax: exempt.
If you live in a state with high income tax, this matters. A T-bill and a bank CD paying the same rate aren't equal after tax: the T-bill leaves you with more.
The interest is taxed in the year the bill matures (or is sold), not when you buy it.
T-bills vs other safe places for cash
| T-bills | High-yield savings | CD | Money market fund | |
|---|---|---|---|---|
| Safety | US government | FDIC insured to limits | FDIC insured to limits | Very high, not insured |
| Access | At maturity, or sell | Any time | Penalty to withdraw early | Any time |
| State tax | Exempt | Taxable | Taxable | Depends on holdings |
| Rate | Fixed until maturity | Can change any day | Fixed | Changes daily |
More in high-yield savings vs money market funds.
Build a T-bill ladder
Instead of one big purchase, split your money across several maturities, for example 4, 13, 26 and 52 weeks. As each bill matures, you either spend the money or roll it into a new bill at the longest rung.
You get cash coming due regularly, and you're not betting everything on one day's rate. The same idea works with longer bonds; see how to build a bond ladder.
When T-bills aren't the right tool
T-bills are for money you need soon or want to keep safe: an emergency fund, a down payment, cash you're waiting to invest.
They aren't a long-term growth investment. Over decades, stocks have returned far more. Don't park your retirement savings in T-bills because the yield looks good today.
The bottom line
T-bills are a simple, safe way to earn interest on short-term cash, with a state tax break as a bonus. If you already have a brokerage account, buy them there or use an ETF. If you're starting from scratch with a small amount, TreasuryDirect works fine.
Frequently asked questions
What is the minimum to buy a Treasury bill?
$100 on TreasuryDirect, in $100 increments. Brokerages often set a minimum of $1,000 per order. T-bill ETFs can be bought for the price of one share, or less if your broker offers fractional shares.
Are Treasury bills safe?
They're backed by the full faith and credit of the US government and are considered among the safest investments in the world. Because they mature within a year, their prices barely move when interest rates change.
How do Treasury bills pay interest?
They don't pay regular interest. You buy the bill for less than its face value and receive the full face value when it matures. For example, you might pay about $990 for a 13-week bill and receive $1,000 at maturity.
Are Treasury bills taxed?
The interest is subject to federal income tax but exempt from state and local income tax. That makes T-bills especially attractive for people in high-tax states.
Can I sell a Treasury bill before it matures?
Yes, if you hold it at a brokerage, where you can sell on the secondary market at any time. On TreasuryDirect you can't sell directly; you must first transfer the bill to a brokerage account.
Are T-bills better than a high-yield savings account?
It depends on rates and your state. T-bill yields are often similar to top savings rates, and T-bill interest is state-tax-free, which can put them ahead in states with high income tax. Savings accounts are simpler and let you withdraw any time.
Primary sources
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 3, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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