Treasury bills are sold at a discount and pay their face value at maturity. Enter the face value, days to maturity and either the discount rate or the price you paid to get the investment rate (bond equivalent yield), the annual percentage yield and the interest you earn.
Last updated:
I know the
$
Amount paid at maturity; bills are sold in $100 increments.
F = face value, P = price, t = days to maturity, d = discount rate. Use 366 instead of 365 when the year after the issue date includes February 29.
Standard Treasury bill terms
Bill
Days
Price per $1,000 at 4% discount
Investment rate
4-week
28
$996.89
4.0682%
8-week
56
$993.78
4.0809%
13-week
91
$989.89
4.0970%
17-week
119
$986.78
4.1099%
26-week
182
$979.78
4.1393%
52-week
364
$959.56
4.1829%
Example rates only. Actual auction results are published by the US Treasury.
Frequently asked questions
How is the T-bill price calculated from the discount rate?
Price = face value × (1 − discount rate × days ÷ 360). A $1,000 bill with a 4% discount rate and 182 days to maturity costs 1,000 × (1 − 0.04 × 182 ÷ 360) = $979.78, and pays $1,000 at maturity, so you earn $20.22.
What is the difference between the discount rate and the investment rate?
The discount rate is measured against the face value on a 360-day year. The investment rate (also called the coupon-equivalent or bond equivalent yield) is measured against the price you actually pay on a 365-day year, so it is always higher and is the better number for comparing with other investments.
How is the investment rate calculated?
For bills of 182 days or less: (face − price) ÷ price × 365 ÷ days. For longer bills such as the 52-week bill, the Treasury uses a formula that assumes semiannual compounding: i = [−2t/y + 2√((t/y)² − (2t/y − 1)(1 − F/P))] ÷ (2t/y − 1), where y is 365 (or 366).
Is T-bill interest taxable?
In the US, T-bill interest is subject to federal income tax but exempt from state and local income taxes. That state exemption can make bills more attractive than CDs for people in high-tax states; the tax-equivalent yield calculator can help compare.
When is the interest paid?
T-bills do not pay coupons. You buy below face value and receive the full face value at maturity; the difference is your interest. It is generally reported for tax in the year the bill matures or is sold.
What is the APY shown here?
APY assumes you could keep reinvesting at the same return for a full year: (face ÷ price)^(365 ÷ days) − 1. It is useful for comparing with savings account APYs, but actual future rates can differ.
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