I put in $5k 4 months ago into a T-Bill on a 4 month T-Bill. The maturity date was last week and $5k was put back into my account. I did buy directly from Treasury direct. Why didn't the interest get put into my account? Should have been 4.35%!?!

Wondering if I did something wrong!?!

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1hotjava t1_ja2zrfr wrote on February 26, 2023 at 1:43 PM

You didn’t pay $5k. You bought it at a discount. T-bills are “zero coupon” meaning they don’t pay an interest payment, instead you buy them for less than face value and get paid face value. The difference between the two numbers equates to the yield you should get.

Edit : so I have a 4mo, it’s face is $20k. I paid $19,694. The price was $98.4712 so the effective yield is 4.76%.

Outsidelands2015 t1_ja60xuf wrote on February 27, 2023 at 2:32 AM

On the secondary market through a brokerage is it any different?

mypantsrblue t1_ja6rim1 wrote on February 27, 2023 at 6:45 AM

You tie up 20K to make $300? Is that a thing that people do that’s advisable?

TH_Rocks t1_ja7ecb5 wrote on February 27, 2023 at 11:57 AM

It's a guaranteed return with no additional effort or gambling on price fluctuations. Yes, people do that.

1hotjava t1_ja7h6az wrote on February 27, 2023 at 12:28 PM

If you had $20k in a savings account making 4.76% after 4 months it would be the same thing.

T-Bills are a solid asset for part of your bond allocation in your overall portfolio. Guaranteed to make the rate that you bought them at

Werewolfdad t1_ja2zsc2 wrote on February 26, 2023 at 1:43 PM

It was. Bills are zero coupon. You buy at a discount and then receive the full face upon maturity.

Grevious47 t1_ja47zjl wrote on February 26, 2023 at 6:51 PM

You didnt pay 5k. How much did you actually pay. Also 4.35% is annualized. For a 4 month tbill you would have earnws 4.35%/3 or 1.45%. So...you likely paid about $4927 for your 5k tbill...check your bank.

Bitter_Signature_421 OP t1_ja5arem wrote on February 26, 2023 at 11:13 PM

I paid $4947.25. I see how this works now. TY for your help.

Better-Scientist272 t1_ja304ki wrote on February 26, 2023 at 1:46 PM

T-Bills trade on a “discount” you buy $100 worth for $95 but get back $100 at maturity, that $5 difference is the interest, you don’t get a separate interest “coupon”. Look at your actual cost basis, I don’t think it’s $5k as that would indeed mean 0% interest which isn’t where rates are these days

2ReddYet t1_ja3b0of wrote on February 26, 2023 at 3:12 PM

might want to review the info under "Bills" on the TD.gov site: https://www.treasurydirect.gov/marketable-securities/understanding-pricing/

Disastrous-Bench5543 t1_ja3q9ur wrote on February 26, 2023 at 4:56 PM

you already got the interest the day you successfully put it in… check ur bank account

Grevious47 t1_ja4874h wrote on February 26, 2023 at 6:52 PM

Well...i get what you mean but you dont actually get the yield until it pays out after 4 months.