Treasury bills (T-bills) may be purchased for $10,000 or higher in multiples of $5,000. When purchasing treasury bills, investors pay less than the face amount to buy the bills, but receive the full face amount when the bill matures. T-bills do not make interest payments.
You must purchase four-week T-bills through a broker or a bank. They are not available directly through the U.S. Treasury. However, you can purchase three-month and six-month Treasury bills directly from the U.S. Treasury - or through a bank or broker. To buy from the Treasury, you would go directly through a Federal Reserve branch or the Bureau of Public Debt. In order to buy directly buy from the Fed, you need to put it in a "noncompetitive bid" at the Treasury's quarterly auction, which means you are willing to pay the average rate for the securities you want.
You can also buy Treasury bills through the U.S. Treasury's Web site, www.treasurydirect.gov. You can go to the site, click on the section for "Treasury Bills, Notes and Bonds," and follow the instructions. You'll be able to buy T-bills (except four-week bills) online, directly from the U.S. Treasury without paying a commission.
Treasury bills are very predictable. When you buy a six-month $10,000 T-bills, you know that in six months, you will correct the full $10,000, no more, no less. You also know you will be earning one of the lowest rates in the fixed-rate market. The biggest concern might be that if Treasury bills rates are lower than the rate of inflation, your wealth in real dollar terms would go down every time you cash out another T-bill.
The only time to buy T-bills is when you have some money you need to stash in a safe place for a short period of time. They are not appropriate for a long-term portfolio. Because of the short-term nature of Treasury bills, you don't really need to monitor your T-bills. But if you want to find more information on T-bills rates, you can find that at www.federalreserve.gov. Yield data and other information Treasury issues is also listed at a number of other web sites.
There is no point allocating any of your long-term investment assets to Treasury bills. If you are interested in interest-based investments, there are a number of better options available.
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