To buy Treasury bills (T-bills), you have several options:
1. Buy Directly from the U.S. Government via TreasuryDirect
- Open an account at TreasuryDirect.gov by providing your Social Security number or Taxpayer Identification Number (TIN), U.S. address, and linking a checking or savings account for payment.
- Once your account is set up, log in and select the "Buy Direct" tab.
- Choose Treasury bills as the security type, specify the amount, and submit your purchase order.
- T-bills are sold at auction at a discount to face value, and the yield is determined by the auction price.
- After purchase, you hold the T-bills electronically in your TreasuryDirect account until maturity.
- Note: You must hold new Treasury securities for at least 45 days before transferring or selling them
2. Buy Through a Brokerage Account
- Many online brokers allow you to buy individual Treasury bills.
- You can place orders to buy T-bills on the primary market (auctions) or buy from the secondary market.
- Some brokers also offer Treasury accounts that automatically purchase and reinvest T-bills for you.
- Buying through a broker may involve fees or commissions
3. Invest via Treasury Bill Exchange-Traded Funds (ETFs)
- If your brokerage does not offer individual T-bills, you can invest in ETFs that hold short-term Treasury bills.
- Examples include SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), iShares 0-3 Month Treasury Bond ETF (SGOV), and iShares Short Treasury Bond ETF (SHV).
- ETFs provide liquidity and diversification but have expense ratios that slightly reduce yield
Summary of Steps to Buy T-Bills on TreasuryDirect:
- Gather your Social Security number or TIN, U.S. address, and bank account info.
- Create and verify a TreasuryDirect account.
- Log in and select "Buy Direct."
- Choose Treasury bills, specify the amount, and submit your order.
- Confirm purchase and receive email confirmation.
- Hold T-bills until maturity or transfer to a broker to sell earlier
Treasury bills are a low-risk investment issued by the U.S. government, sold at a discount, and mature in terms ranging from 4 to 52 weeks
. This process allows individuals to invest securely in government debt with minimal fees when buying directly from TreasuryDirect. Alternatively, brokerage accounts and ETFs offer more flexibility and liquidity options
