How Do You Buy Treasury Bills? A Beginner's Guide

A Beginner's Guide to Purchasing Treasury Bills

Cash held in a standard savings account is easy to access, but it may not earn very much as it sits idly. Treasury bills (or T-bills) offer another, higher-yield place to hold your funds. They’re backed by the U.S. government, mature within one year, and can be purchased in a variety of different ways.

In this article, we’ll explore how T-bills work, what determines their rates, and the ways you can buy them from both primary and secondary markets. Along the way, we’ll take a look at Slash, a financial platform with a treasury account that can earn up to 3.77% annualized yield through money market funds managed by BlackRock and Morgan Stanley.¹,⁶

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Key Takeaways

With a T-bill, you buy below face value and collect the difference at maturity, meaning a $10,000 bill bought for $9,800 can return $200 to the holder.
The auction sets your rate rather than you, since TreasuryDirect accepts only noncompetitive bids where you pick the term and amount but take whatever rate results. Every successful bidder receives the rate tied to the highest accepted competitive bid.
TreasuryDirect’s 45-day holding period can be a hurdle, since new purchases can’t be transferred or sold during that window, and a 4-week bill can’t be sold early at all since it matures before the restriction lifts.
T-bill interest is subject to federal income tax, but exempt from state and local, which changes the after-tax comparison against a savings account if you operate in a high-tax state.
Owning a bill and holding a government money market fund don’t come with the same exposure. A bill carries a defined maturity and face value, while a fund’s yield floats with its portfolio and there’s no single security to hold to term.

Understanding Treasury Bills

Treasury bills, usually called T-bills, are short-term debt obligations issued by the U.S. Department of the Treasury. The current standard maturities are 4, 6, 8, 13, 17, 26, and 52 weeks. Unlike Treasury notes and bonds, bills don’t make periodic coupon payments. They’re generally sold below face value, and the investor receives that full face value once they hit maturity. For example, if a business buys a $10,000 bill for $9,800 and holds it to maturity, the $200 difference is its return.

Treasury securities are backed by the full faith and credit of the United States, which is why they’re generally treated as some of the lowest-credit-risk investments available in US dollars. Interest is subject to federal income tax, but exempt from state and local income taxes. All that said, T-bills aren’t bank deposits, and shouldn’t be treated as such. Selling before maturity can certainly produce a gain or loss if market rates have changed.

From a business’s point of view, the appeal is a combination of capital preservation, short maturity, and predictable cash flow. A company can match bills to future payroll, tax, inventory, or acquisition dates instead of locking money away for several years. It can also stagger bills across different maturity dates, which allows part of the balance to return regularly while the remainder continues earning a market-based yield.

Treasury Bill Rates

T-bill rates are set through Treasury auctions rather than selected in advance by the buyer. Treasury accepts noncompetitive bids first, then competitive bids from the lowest requested rate upward until the offering is filled. Every successful bidder receives the rate associated with the highest accepted competitive bid. A TreasuryDirect buyer, therefore, knows the amount and term before bidding, but not the final purchase price or rate.

Short-term Treasury yields respond to Federal Reserve policy, inflation expectations, demand for safe assets, and the supply of bills being issued. Price and yield move in opposite directions: stronger demand raises the price paid for a bill and reduces its yield, while weaker demand usually produces a lower price and higher yield.

Rates can change significantly across economic cycles. The average three-month bill rate fell to 0.04% in February 2021, climbed to 5.34% in October 2023 as monetary policy tightened, and averaged 3.94% in September 2026. That’s pretty erratic. So, businesses should check current auction results rather than treating an old advertised rate as permanent.

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How to Buy Treasury Bills

There are four main ways to buy T-bills, each with their own level of convenience, fees, and control. No matter the method, though, they give you exposure to the same underlying U.S. government debt. Your four options are:

TreasuryDirect Auctions

TreasuryDirect is the US government’s system for purchasing and holding marketable Treasury securities. Individuals and entities (including corporations, partnerships, trusts, and estates) can open accounts. Purchases start at $100, and must be made in $100 increments.

TreasuryDirect only accepts noncompetitive bids. That means you choose the bill term and amount, agree to accept the auction rate, and are guaranteed the requested quantity if the bid follows the rules. Noncompetitive bids can reach up to $10 million per auction. Your payment comes from a linked bank account or TreasuryDirect Certificate of Indebtedness, and maturing proceeds can be reinvested into another bill of the same type.

The main advantages to these auctions are direct ownership and no TreasuryDirect fee for purchases or reinvestments. The tradeoff, however, is flexibility. New marketable securities bought there have to remain in the account for 45 days before they can be transferred or sold. Selling also requires moving the security to a bank, broker, or dealer first, which means it’s easier to plan on holding the bill until maturity. A four-week bill purchased through TreasuryDirect can’t be sold early at all, since it matures before the holding period ends.

Broker and Bank Purchases

Banks, brokers, and dealers can submit both noncompetitive and competitive auction bids. A noncompetitive order accepts the auction result, while a competitive bid specifies the minimum rate the investor will accept. With a competitive bid, you may receive all, part, or none of the requested amount.

For most individuals and smaller businesses, the advantage is account convenience rather than competitive bidding. T-bills can sit beside other securities, and some brokerage platforms support automatic reinvestment or “auto-roll” when an existing bill matures. Brokerages also make it easier to access both new auctions and previously issued securities. Costs vary, so it’s best to review commissions, bid-ask spreads, custody charges, and any markup built into the quoted price.

A brokerage account can be especially useful for businesses that already hold other investments or want one place to purchase, sell, report, and work with tax documents. The catch is that the business ends up introducing another financial provider rather than dealing directly with the Treasury.

Trading Through Secondary Markets

With the help of secondary markets, you don’t have to wait for a new auction at all. Previously issued Treasury bills get traded in the secondary market through banks and broker-dealers. This lets a buyer choose a specific maturity date and see the market price before submitting an order. Recently issued bills are generally the most actively traded.

The problem with this method is the market risk. If rates rise after a bill is issued, its price will usually fall so its remaining return can compete with newer bills. Selling before maturity may therefore produce less than the purchase price. If you hold a bill to maturity, you’ll still receive the face value, but you have to account for brokerage spreads and confirm that the maturity date fits your company’s cash needs.

TreasuryDirect itself doesn’t provide a secondary-market trading screen. Securities held there must be transferred to a commercial bank, broker, or dealer before sale, and the 45-day holding rule applies to most new purchases.

Treasury Platforms

Treasury platforms can reduce the operational work of comparing auctions, scheduling reinvestments, and moving funds between a bank and brokerage. Some purchase individual bills in a custodial investment account and automatically reinvest the proceeds. Others provide exposure through government money market funds that hold T-bills and related government-backed instruments.

That’s a big distinction. Direct bill ownership gives the business a defined maturity and face value. A money market fund may offer more readily available exposure, but its yield changes with the portfolio and it doesn’t give the investor one specific bill to hold until maturity.

Before choosing a platform, compare factors like the underlying assets, management and platform fees, minimum balance, withdrawal timing, custody arrangement, account protections, and whether the quoted yield is net of expenses.

Get Access to High-Yield Treasury With Slash

Through Slash Treasury, users can get up to 3.77% annualized yield through a treasury account that comes as part of the Slash business banking platform. Slash invests through two funds: Morgan Stanley's MULSX, an ultra-short income portfolio holding high-quality commercial paper, corporate debt, and other money market instruments, and BlackRock's TSTXX, which holds cash, U.S. Treasury bills and notes, and Treasury-backed repurchase agreements.

Managing auctions, rolling maturities, and maintaining a separate brokerage account takes time and effort that most business owners don’t have to spare. With Slash, all you have to do is allocate your idle cash to either fund based on your preferences. You can get the strong returns without the hassle.

Slash Treasury is only a small part of our wider financial platform, which comes with the following features:

Payment processing: Let customers pay your invoices by card, add secure checkout components to your existing webpage, track payments from purchase to payout, and manage your incoming revenue from the Slash dashboard.
Native cryptocurrency support: Send and receive USD-pegged stablecoins USDC and USDT across 15 supported blockchains for faster, lower-cost global payments.⁴
Diverse payment rails: Slash supports a wide range of payment methods, including card spend, global ACH, international wire transfers to over 180 countries via SWIFT, and real-time domestic payments through RTP and FedNow.
The Slash Visa® Platinum Card: The Slash Card is a corporate charge card that allows you to set customizable spending controls and issue unlimited virtual cards for handling team expenses, vendor payments, subscriptions, and more. Users can also earn up to 2% cash back on eligible business purchases.
Business banking: FDIC-insured business checking, protected up to $150M through Column N.A.'s insured cash sweep network.²

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Frequently Asked Questions

What’s the difference between a treasury account and a savings account?

A savings account is a bank deposit, which means your balance is a liability of the bank, the rate is whatever the bank decides to pay, and the principal is FDIC insured within applicable limits. A treasury account is an investment account that holds securities or fund shares, so the yield reflects market rates rather than a posted bank rate, and the balance can move with the value of what it holds.

What is a Treasury bill ladder?

A ladder means buying treasury bills with staggered maturity dates, so instead of one lump sum coming due, you have a portion maturing on a rolling basis. The main benefit of buying T-bills this way is recurring access to cash without ever selling early, which can basically sidestep the market risk of an early sale.

How much cash should a business actually move into treasury?

It’s best to keep enough in your checking account to cover operating expenses and any near-term obligations, while the surplus stays in treasury. Another strategy is matching maturities to known outflows, so a bill comes due shortly before a payroll run, a tax payment, or an inventory order rather than on an arbitrary date.