How to Buy Treasury Bills
Treasury bills, or T-bills, are short-term securities sold by the U.S. government. These investments are generally considered risk-free because they are backed by the credit of the United States government. When deciding how to buy Treasury bills, you should consider a few options.
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Instructions
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1
Go to your local bank to buy Treasury bills. This may be the easiest option because you already make periodic trips to your bank.
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2
Call your investment broker or dealer. If you have one, call him and tell him that you want to purchase a Treasury bill.
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3
Buy Treasury bills directly. The U.S. Treasury sells T-bills. The Treasury Direct website will guide you through this process.
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4
Open a Treasury securities account. You can do this on the Treasury Direct website. Just provide the usual information--such as a Social Security number, bank account and routing numbers and driver's license number--and answer some questions about yourself.
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Understand noncompetitive bidding. This means that you are buying a treasury bill at the rate determined at auction.
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Know about competitive bidding. This means that you specify the rate at which you want to buy your T-bill.
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Tips & Warnings
Competitive bids can be accepted for the full amount, accepted for less than the full amount or rejected, so bid wisely.
Hold your Treasury bill until its maturity date so that you will be paid the full amount of interest earned.
If you want to bid competitively, you have to use your broker or bank.
Treasury bills are sold in increments of $1,000.
You cannot purchase Treasury bills at your local Federal Reserve.
If you are looking for long-term investments, T-bills are not for you.
Businesses cannot have accounts with Treasury Direct.
Interest on your T-bill will not be paid until maturity.
