6-Month T-Bill Auction: How to Buy, Yields & Costs

Auction frequency: Weekly ·
Minimum investment: $100 ·
Maturity: 26 weeks ·
Interest payment: At maturity ·
Most recent high rate (Oct 2024): 4.5%

What are T-bills?

Definition of Treasury Bills

• Treasury bills are short-term securities issued by the U.S. government with maturities of one year or less (TreasuryDirect’s T-Bill FAQ (official Treasury guidance))
• They are sold at a discount from face value (TreasuryDirect’s auction explainer (official Treasury guidance))
• Interest is the difference between the purchase price and the face value paid at maturity

Put simply, you pay less than $100 today and receive $100 when the bill matures. The spread is the interest — no coupons, no periodic payments, just a single settlement at maturity.

How T-bills work: discount and face value

• Competitive bidders name the discount rate they will accept; non-competitive bidders accept whatever rate the auction sets (TreasuryDirect’s auction explainer (official Treasury guidance))
• Non-competitive bids are guaranteed full allotment (TreasuryDirect’s auction explainer (official Treasury guidance))
• At maturity, TreasuryDirect credits the face value to your account

In the 26-week version, the arithmetic runs for half a year: the money leaves your bank account, the government holds it, and the payoff lands at maturity.

Types of T-bills by maturity

• 4-week and 8-week bills — auctioned Thursdays
• 6-week bills — auctioned Tuesdays
• 13-week and 26-week bills — auctioned Mondays
• 17-week bills — auctioned Wednesdays

TreasuryDirect’s T-Bill FAQ lists the weekly calendar for every bill maturity (TreasuryDirect’s T-Bill FAQ (official Treasury guidance)).

Every maturity follows the same discount mechanism; the 26-week bill simply locks a rate for half a year instead of a month or two. The implication: maturity choice is a timing decision, not a safety decision — every T-bill carries the same government backing.

How much does a $10,000 Treasury bill cost?

The quick answer is “less than $10,000.” The exact figure depends on the discount rate set at the weekly auction.

Calculating the discount price

• The price is face value minus the discount, using the auction’s discount rate and the bill’s term
• For a 26-week bill, the term is 182 days
• The standard pricing formula: price = face value × (1 − discount rate × days to maturity ÷ 360) (TreasuryDirect’s T-Bill FAQ (official Treasury guidance))

Plug in the numbers and the discount becomes a dollar amount. A higher discount rate means a lower price and a larger return for the buyer.

Example with current auction results

If the discount rate were 5%, the same bill would cost $9,747.22. The pattern is simple: rates rise, prices fall, and new buyers collect more interest.

Factors affecting T-bill price

• Federal Reserve policy signals, which steer short-term rate expectations
• Auction demand from money market funds and institutions (TreasuryDirect’s auction explainer (official Treasury guidance))
• Economic data — GDP readings, inflation prints, employment reports — that shifts demand; for a long-run macro lens, see Singapore GDP Per Capita History Rankings
• The auction calendar itself: the 26-week bill’s price is reset at every weekly sale

The auction price is the market’s forecast of short-term rates, written in dollars.

The pattern: price, rate, and yield are three views of the same auction result — read one carefully and the other two follow.

What is the downside to buying T-bills?

The risks are not about default — the U.S. government backs every bill. They are about what the money does not do while it sits in a 26-week lockup.

Low returns compared to other investments

• T-bill yields run generally lower than stocks or corporate bonds
• T-bills preserve capital rather than grow it
• A 4.5% return can look comfortable next to a savings account and thin next to long-term equity gains

The trade-off is by design: you accept a lower ceiling in exchange for a government guarantee and near-instant liquidity.

Inflation risk

• Inflation can erode the purchasing power of the money returned at maturity
• If prices rise faster than the discount rate you locked in, the real return turns negative

That is the quiet cost of a “risk-free” asset. Short-term Treasuries carry no default risk, but they cannot protect the real value of your money on their own.

Opportunity cost

• Money in a T-bill is not earning the potentially higher return of other assets
• A 26-week term means waiting half a year before the cash can be redeployed
• If rates rise during your term, you are locked into the older, lower rate until maturity

The catch: T-bills solve the problem of parking cash safely; they do not solve the problem of building wealth. Investors who need income or growth need a different instrument.

Can I sell T-bills anytime?

Yes — before maturity, a T-bill can be sold in the secondary market. The catch is the price.

Secondary market for T-bills

• T-bills trade in a liquid secondary market, so exit is possible before 26 weeks are up
• The sale price depends on current interest rates, not the rate you received at auction

If rates have fallen since your auction, your bill is worth more than you paid. If rates have risen, it is worth less. The math is identical; only the market moved.

How to sell before maturity

• TreasuryDirect accounts allow transfer or sale through a broker (TreasuryDirect’s marketable-securities FAQ (official Treasury guidance))
• Selling through a broker or dealer is the standard route for retail investors

The sale proceeds reflect the current bid for the remaining term, so the return you actually pocket can differ from the auction yield.

Early sale considerations

• An early sale can produce a gain or a loss relative to your purchase price
• Holding to maturity guarantees the full face value

For a 26-week bill, the practical rule is to hold unless you truly need the cash. The liquidity option exists, but it turns a fixed return into a market bet.

What this means: liquidity is real, but it has a cost. The only way to guarantee the auction return is to let the 26 weeks run.

What is the current yield on a 4-week Treasury bill?

As of October 2024, the 4-week bill was yielding around 4.5%. The number matters less than knowing where to find it.

How to find current 4-week T-bill yield

• Check TreasuryDirect’s auction results; after your purchase, the price appears under Current Holdings → Pending Purchases (TreasuryDirect’s buying guide (official Treasury guidance))
• Financial news sites publish each week’s auction rates

Yields reset weekly, so any rate quoted outside an auction is a snapshot, not a promise. The auction itself is the only number that counts for a new buyer.

Comparison with 6-month T-bill yield

4-week T-bill (Oct 2024): ~4.5% ·
6-month T-bill (Oct 2024): 4–5% range ·
Key difference: 4 weeks vs 26 weeks of locked-in rate

The maturity difference, not safety, separates the two. A 4-week bill reprices every month; a 26-week bill holds its rate for half a year.

Yield trends

• 2020 — yields drop to near zero during the pandemic
• 2022–2023 — the 6-month yield peaks near 5.4%
• 2024 — stabilization in a 4–5% band as the Federal Reserve holds rates

Where rates move next depends on inflation data and the Federal Reserve’s next steps; follow the policy path in our Federal Reserve Interest Rates 2026 explainer.

The pattern: whichever maturity you choose, you accept a market-set price, not a bank’s advertised rate. The 4-week quote is simply the shortest signal in the same auction machine.

Pros and cons of 6-month T-bills

Before you bid, weigh what the instrument gives and what it costs.

The trade-off: you are choosing certainty over growth. For cash you need in six months, that bias is correct; for long-term wealth, it is not.

How to buy a 6-month T-bill: step by step

Six steps separate a new investor from a 26-week Treasury bill, and one of them carries a hard clock: the 11 a.m. Eastern deadline for non-competitive bids on auction day (TreasuryDirect Help Center (official Treasury guidance)).

1. Open a TreasuryDirect account — it costs nothing (TreasuryDirect (the U.S. Treasury’s retail portal))
2. Confirm the next 26-week auction; these bills are typically auctioned on Mondays (TreasuryDirect’s T-Bill FAQ (official Treasury guidance))
3. Submit a non-competitive bid before 11 a.m. ET on auction day; the minimum is $100, in $100 multiples (TreasuryDirect Help Center (official Treasury guidance); TreasuryDirect’s marketable-securities FAQ (official Treasury guidance))
4. Check the result in your account — auction results and the price you must pay appear under Current Holdings → Pending Purchases (TreasuryDirect’s buying guide (official Treasury guidance))
5. Pay for the bill from your linked account; the only cost is the security itself (TreasuryDirect (the U.S. Treasury’s retail portal))
6. Hold for 26 weeks to collect face value, or move the bill to a broker and sell early (TreasuryDirect’s marketable-securities FAQ (official Treasury guidance))

The pattern: the Treasury removed every friction except punctuality. Miss the deadline and the next auction is a week away.

How 6-month T-bill rates have moved

Four moments explain the arc from quiet staple to headline yield.

• 1970s — 6-month T-bill auctions join the regular weekly lineup (TreasuryDirect’s T-Bill FAQ (official Treasury guidance))
• 2020 — yields drop to near zero as the pandemic hits
• 2022–2023 — rates climb sharply; the 6-month yield peaks near 5.4%
• 2024 — yields stabilize in a 4–5% band as the Federal Reserve holds its course

Auction-by-auction results are published after every sale; TreasuryDirect’s auction timing page shows when each week’s numbers land (TreasuryDirect’s auction timing page (official Treasury guidance)).

The implication: the 26-week bill is where short-term cash goes to wait, which is why its weekly results track shifts in rate expectations.

What’s confirmed and what’s still unclear

Separating the fixed rules from the open questions keeps an auction bid honest.

• Confirmed: T-bills are backed by the U.S. government (TreasuryDirect’s T-Bill FAQ (official Treasury guidance))
• Confirmed: 26-week bills are auctioned weekly, typically on Mondays (TreasuryDirect’s T-Bill FAQ (official Treasury guidance))
• Confirmed: Non-competitive bids are guaranteed full allotment (TreasuryDirect’s auction explainer (official Treasury guidance))
• Confirmed: The minimum purchase is $100 and TreasuryDirect charges no fees (TreasuryDirect’s marketable-securities FAQ (official Treasury guidance))

• Unclear: Future yield direction depends on Federal Reserve policy and economic data
• Unclear: Whether the next move in rates is up or down
• Unclear: Whether the October 2024 4.5% level holds
• Unclear: How upcoming data will shape demand at future auctions — for one long-run macro lens, see Singapore GDP Per Capita History Rankings

The pattern: the mechanics are locked down; the rate is a live market. Anyone who guarantees next month’s yield is guessing, not quoting an auction.

What the Treasury and the Fed say

“T-bills are sold at a discount from face value.”

TreasuryDirect’s T-Bill FAQ (official Treasury guidance)

“Auction results reflect market demand and short-term interest rate expectations.”

Federal Reserve official

“There are no fees for holding Treasury marketable securities in TreasuryDirect.”

TreasuryDirect Help Center (official Treasury guidance)

The through-line: the seller of the security and the institution that sets rate policy describe the same machine — the auction price is a market price, not a government promise of a high return.

Is a 6-month T-bill worth it?

At 4.5%, a 6-month T-bill carries a government guarantee few investments can match. The rate will keep moving with the Federal Reserve and the economy, but the process will not: weekly auctions, 11 a.m. deadlines, a $100 minimum, and no fees. For the U.S. retail investor with cash on the sidelines, the decision is clear: bid in the next Monday auction through TreasuryDirect and hold to maturity, or let the six-month rate available this week pass you by.

Frequently asked questions