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How to Buy Treasury Bills and Treasury Notes

A shimmering golden number one hundred in the corner of a United States one hundred dollar bill.

I'm discussing different bills in this post, but you can buy treasury bills and notes in one hundred dollar increments, so the photo kind of fits. Photo by Giorgio Trovato on Unsplash

Treasury bills and notes are two securities products offered by the United States Treasury Department. One reason to invest in U.S. securities like bills and notes is because they're very low-risk. It's unlikely, after all, that the federal government won't pay its debts.

Treasury bills and notes are also tradable on the secondary market. You can sell them before they reach maturity. Buying treasury bills and notes, however, is a little less straightforward than buying shares of stocks or an ETF. Here's what I've learned about the process.

First, Choose Your Dealer

You have two options for buying treasury bills and notes:

  1. use a brokerage, such as Fidelity, TDAmeritrade, or Schwab1; or
  2. use TreasuryDirect.gov.

Advantages of using a brokerage account:

  • You can track all of your investments in one place.
  • You can buy bills and notes on the secondary market.
  • It's easier to sell the security if you don't plan to hold it to maturity.
  • You can make competitive bids, which may give you better pricing.2

You can only make non-competitive bids using TreasuryDirect. You have less control over pricing, and pay whatever discounted rate was set at auction. That said, there are some pros of using TreasuryDirect instead of a brokerage3:

  • You can schedule purchases days or weeks in advance.
  • You can buy bills and notes in $100 increments. Some brokerages impose a purchase minimum of $1000.
  • You can schedule the proceeds to be reinvested when the security matures.

I've purchased bills and notes through my brokerage and through TreasuryDirect, and have a slight preference for TreasuryDirect. There's no need to know what a CUSIP is or where to find it. I also hold plan to hold my securities until they mature.

Treasury Bills versus Treasury Notes

Treasury bills, also known as T-Bills are short-term securities. They're available with maturities of 4, 8, 13, 17, 26, or 52 weeks.

When you buy a treasury bill, you're basically buying money at a discount. For instance, $100 might cost you $99.30. At maturity, the government pays you the full or par value of $100. The difference between your discount and the full value of your T-bill is your yield. It's not exactly interest, but it functions similarly.

You can calculate the annual percentage yield of a treasury bill using the JavaScript below.

const annualized_tbill_yield = (price, weeks_to_maturity, is_leap_year = false) => {
    const FULL_VALUE   = 100;
    const DAYS_IN_YEAR = 365;
    const DAYS_IN_WEEK = 7;

    const leap_day = is_leap_year ? 1 : 0;

    const discount = (FULL_VALUE - price);
    const the_yield = (discount / price) * FULL_VALUE;

    const days_to_maturity = weeks_to_maturity * DAYS_IN_WEEK;

    const annualized = the_yield * ((DAYS_IN_YEAR + leap_day) / days_to_maturity);

    return `Annualized yield on this note is: ${ annualized.toFixed(3) }%`;

// Example of use
console.log( annualized_tbill_yield(99.30, 4) );

Treasury notes, on the other hand, are more like short-duration bonds. You can buy notes with a maturity of 2, 3, 5, 7, or 10 years.

Treasury notes pay a fixed rate of interest every six months until the note matures, with a minimum rate of 0.125%. As of Apri 17, 2023, a 10-year treasury note pays 3.500%, while 2 and 3 year notes pay 3.875% and 3.750%, respectively.

Notes are priced at auction, using competitive bids as a guide. You'll generally pay close to the note's par value. For example, I recently bought a 2-year treasury note worth $200, and paid $198.73 ($99.36 per $100) for it. At maturity, I'll receive the par or face value of the note, plus the total interest paid over the note's duration.

Bills, Notes, and CUSIP Numbers

You may need to know the CUSIP number of a security before you buy it. TreasuryDirect lists CUSIP and auction date information for new and recently-issued securities on its Upcoming Auctions page.

Find the CUSIP number of the bond or note you'd like to purchase. Then search for that CUSIP on your brokerage's website. Look in your brokerage's bonds and fixed-income section.

Buying Bills and Notes on the Secondary Market

When interest rates go up, the price of existing treasury securities decreases. Since older bills and notes pay than the going interest rate, prospective buyers are willing to pay less for them.

For example, 91282CCS8 is a 10-year treasury note with a coupon (interest rate) of 1.25%.4 When first issued in August 2021, it sold for $99.16 per $100. As of April 28, 2023, it's selling for about $84.60 per $100 — a yield of about 3.389%.5 That's much closer to current 10-year treasury note rates.


I'm not a financial advisor. I just post opinions on the internet. You may want to talk to a professional before you make any decisions. Or not. I currently manage investments for me and my husband based largely on stuff I've read in library books. 🤷🏽‍♀️

Whether treasury bills and notes are right for you depends on your investment objectives and risk tolerance. I think they're worth owning given current interest rates when compared to dividend yields.

  1. Your bank may or credit union may also have a brokerage arm. Keeping your money with one institution may help you get discounts on checking and other services. It's something to investigate. 

  2. You can sometimes pay more than the par value for a bill or note if you buy it on the secondary market. You can avoid this by placing a limit order for purchase. Just keep in mind that you may not be able to complete a purchase at or below the limit you've set. 

  3. Some brokerages may offer the option to schedule purchases and automatically reinvest the proceeds. My brokerage offers the latter, but not the former. 

  4. Use the Auction Query page to find historical pricing data for U.S. securities. 

  5. Investopedia explains how to calculate treasury yields, but your brokerage's web site should also provide that information.