Treasury Bills (T-Bills): What $1,000 Costs at the Latest Auctions, and How They Work
Michael Whitman
·
Trading since 2017, full-time since 2020
·
YouTube creator, 137K subscribers
·
Published 2026-09-08
·
Updated
·
Reviewed
A Treasury bill is short-dated government debt sold below its face value and redeemed at face value, so the return is the discount rather than a coupon. Because the maturity is measured in weeks or months, its price barely moves when rates change.
A Treasury bill (T-bill) is a loan to the US government for 4 to 52 weeks: you pay less than the face value now and get the full face value back at maturity, and that difference is all the interest you earn. At the 26 October 2026 auction a 13-week bill with a $1,000 face value cost $989.76, so it pays $10.24 when it matures on 28 January 2027.
Nothing arrives in between, and nothing about the payout is uncertain once you own it. The questions worth answering are what a bill costs today, what the quoted rate really means, and what happens when it matures and has to be replaced.
What a $1,000 T-bill costs right now
Treasury sells a bill at whatever price its auction clears. These are the latest regular auction results for each term on TreasuryDirect’s auction service, read on 1 November 2026, restated for a $1,000 face value.
| Term | Auction | Days | You pay | Interest at maturity | Discount rate | Investment rate |
|---|---|---|---|---|---|---|
| 4-week | 29 Oct 2026 | 28 | $996.96 | $3.04 | 3.910% | 3.976% |
| 6-week | 27 Oct 2026 | 42 | $995.39 | $4.61 | 3.950% | 4.023% |
| 8-week | 29 Oct 2026 | 56 | $993.75 | $6.25 | 4.020% | 4.101% |
| 13-week | 26 Oct 2026 | 91 | $989.76 | $10.24 | 4.050% | 4.149% |
| 17-week | 28 Oct 2026 | 119 | $986.32 | $13.68 | 4.140% | 4.256% |
| 26-week | 26 Oct 2026 | 182 | $978.72 | $21.28 | 4.210% | 4.361% |
| 52-week | 27 Oct 2026 | 364 | $956.62 | $43.38 | 4.290% | 4.496% |
Longer bills paid a little more per year that week, and much more in dollars because the money is tied up longer. The 4-week bill’s $3.04 and the 52-week bill’s $43.38 are both about 4% a year; they just cover very different spans. A new auction runs every week for every term except the 52-week, so these prices are a snapshot that will be out of date within days. The full table, with CUSIPs, is in the latest bill auctions file.
How it works
You buy at a discount and are repaid at par. The price per $100 of face value is set at auction, and the bill drifts up toward $100 as maturity approaches, which is why a bill held to the end has a result known on the day it was bought.
TreasuryDirect’s bill page, read on 1 November 2026, sets the ground rules: terms of 4, 6, 8, 13, 17, 26 and 52 weeks; a $100 minimum in $100 steps; weekly auctions for every term except the 52-week, which is sold every four weeks; a $10 million cap on a non-competitive bid and 35% of the offering for a competitive one. Cash management bills also exist, on no fixed schedule, and are sold only through banks, brokers and dealers.
A non-competitive bid simply accepts the auction’s result, which is how most individuals buy. Competitive bidders name a discount rate, and the highest rate that fills the offering, the market-clearing rate, becomes the rate everyone is paid.
Interest is taxed federally but not by states or localities, per the same TreasuryDirect page. For a bill held to maturity the taxable interest is the face value minus what you paid.
How to buy a T-bill
There are two routes, and they differ in what you can do later. TreasuryDirect’s buying page, read on 1 November 2026, says you need a TreasuryDirect account to buy there, and that account takes non-competitive bids only. The other route is a bank, broker or dealer, which can place either kind of bid.
Through TreasuryDirect you pick the term and the amount before the auction closes, in $100 steps, and you pay the price the auction sets. The same page says new Treasury securities must be held for at least 45 calendar days before they can be transferred or sold, so a 4- or 6-week bill bought there (28 or 42 days) is in practice a hold-to-maturity purchase.
Through a brokerage account you can bid at auction or buy a bill that is already trading, and a bill held there can usually be sold before maturity at the market price. Whichever route you use, the auction result is the same for everyone who bid non-competitively that week.
A worked example: the 3-month bill
Take the 13-week bill auctioned on 26 October 2026, issued 29 October and maturing 28 January 2027, 91 days later. The auction price was $98.976250 per $100.
For $1,000 of face value you pay $989.7625, which rounds to $989.76. On 28 January you receive $1,000.00. The interest is $10.2375, or 1.03% of what you paid, earned in 91 days.
The discount rate is figured on the face value and a 360-day year: $10.2375 ÷ $1,000 × 360 ÷ 91 = 4.050%. That is the number the bill was auctioned at and the one most quote screens show.
The investment rate is figured on the price you paid and a 365-day year: $10.2375 ÷ $989.7625 × 365 ÷ 91 = 4.149%. Treasury publishes both, and this second one is the fair comparison with a savings account or CD rate, because it measures the return on the money that actually left your account.
Scale it up and the dollars follow: $10,000 of face value at that auction cost $9,897.625 and pays $102.375 at maturity, about $9,897.63 and $102.38 in whole cents.
Why the quoted rate reads low, and the 52-week twist
Two things push the investment rate above the discount rate. It divides by the smaller number (the price, not the face value), and it uses 365 days instead of 360. Both effects grow with the level of rates, so the gap is small today and was large in the early 1980s.
Bills longer than six months add a third adjustment. For those, Treasury’s investment rate assumes the interest could compound halfway through the year, the way a semiannual coupon would. Run the 52-week bill from 27 October through the simple formula and you get 4.55%; Treasury’s compounding formula gives 4.496%, which is exactly the published figure. The two methods answer slightly different questions, and only the published one is directly comparable with a Treasury note’s yield.
T-bills or CDs?
It comes down to four differences rather than one rate.
State tax. Bill interest is exempt from state and local income tax; CD interest is not. With the 26-week bill at a 4.361% investment rate, someone paying a hypothetical 5% state income tax would need a fully taxable rate of 4.59% to keep the same amount after state tax (4.361% ÷ 0.95). This ignores federal deductions, which can shrink the difference.
Getting out early. A bill can be sold before maturity at the market price, which could be above or below what you paid. A CD usually charges an early-withdrawal penalty set by the bank.
Who stands behind it. A bill is a direct obligation of the US government. A bank CD is covered by FDIC insurance up to that program’s limits.
Term choice. Bills stop at 52 weeks. Certificates of deposit commonly run for several years, which fixes a rate for longer if that is what you want.
The original data
What a $1,000 bill pays, by term, at the latest auctions. Every price and rate below comes from TreasuryDirect’s auction service read on 1 November 2026, and both published rates were recomputed from the published price with Treasury’s formulas: all 14 matched to the three decimals published.
What rolling actually earned. This test follows $10,000 through every 13-week bill since the first issue of January 1980. Each time a bill matured, the $10,000 bought the next 13-week bill issued that day at its auction price, and the interest was taken out, so the principal stays fixed and each year’s figure is pure income. Every year from 1982 to 2025 had exactly four maturities. One week was idle: the bill that matured on 24 September 1987 had no 13-week bill issued the same day, so the money waited until 1 October.
The income swung far more than any bill price ever does. It was $1,193.75 in 1982 and $483.41 in 2007. The seven years from 2009 to 2015 paid $61.96 in total, with 2015 the low at $2.66. 2021 paid $5.44 and 2024 paid $533.69, about 98 times as much on the same $10,000. In 11 of the 44 years the income was under $100.
Checked against a second Treasury file. Fiscal Data’s auction dataset holds 2,442 13-week results, and all 2,442 match TreasuryDirect’s by CUSIP and issue date at an identical price; TreasuryDirect also has the 22 and 29 October 2026 issues, whose results Fiscal Data had not posted yet. Every bill in the test is listed in the 13-week roll file, and the yearly totals are in the roll income table.
How far the discount rate understates the yield depends on the rate level. Across 2,442 26-week auctions from 28 December 1979 to 13 October 2026, the median gap between the investment rate and the discount rate was 0.002 points when the discount rate was under 1%, 0.180 points at 4% to 5%, and 1.061 points at 10% and above. The widest was 24 August 1981: a 15.836% discount rate against a 17.450% investment rate. The auction-by-auction figures are in the 26-week rate gap table.
When it fails
The quiet failure is treating a rolling bill position as a permanent home for long-term money. Each rollover feels safe because no price ever falls, but the roll test shows what the income can do: $10,000 that paid $483.41 in 2007 paid $15.93 in 2009, and stayed near nothing for years. Nothing went wrong on any single day, so there was never a loss to notice, only income that stopped arriving.
The second failure is comparing the discount rate with a bank’s rate. The bank quotes a yield on your deposit; the bill’s headline rate is figured on face value over 360 days. Use the investment rate.
The third is selling before maturity. The known outcome only exists if you hold the bill to the end; sold early, it fetches whatever the market pays that day, minus the bid-ask spread.
The fourth is using the simple formula on a 52-week bill and comparing the result with a note’s yield, which overstates the bill by about 0.05 points at today’s rates.
And the fifth is paying a large fee to hold something this plain. On an asset paying about 4%, a fee of even a fraction of a percent is a meaningful share of the return.
Questions people ask
How much does a $1,000 T-bill cost?
It depends on the term and the week. At the auctions of 26 to 29 October 2026, $1,000 of face value cost $996.96 for 4 weeks, $989.76 for 13 weeks, $978.72 for 26 weeks and $956.62 for 52 weeks.
How much does a 1-year Treasury bill pay?
The 52-week bill auctioned on 27 October 2026 pays $43.38 on each $1,000 of face value at maturity on 28 October 2027, an investment rate of 4.496%.
How much interest will I earn on a 3-month Treasury bill?
At the 26 October 2026 auction, $10.24 per $1,000, or $102.38 on $10,000, paid when the bill matures 91 days later.
Is it better to buy CDs or Treasury bills?
Neither is better in general. Bills are free of state income tax and can be sold before maturity; CDs can lock a rate for several years and are FDIC-insured up to the limit. Compare the bill’s investment rate, adjusted for state tax, with the CD’s yield.
Related
Bonds is the longer-dated version, with the opposite risk: price moves instead of income. Money market funds hold bills like these and do the rolling for you. Reinvestment risk is the name for what the roll test measures. And an emergency fund is the job a bill is most often doing.
The thing worth internalizing is that the risk did not disappear, it moved. A long bond carries the risk that rates rise and its price falls. A bill carries the risk that rates fall and the next one pays less. Neither is safe; they are exposed to opposite ends of the same thing.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.