Where to purchase treasury bills

Treasury bonds or T-bonds : Long-term debt securities that mature between 10 and 30 years. With investing, usually the higher the risk, the higher the return.

This applies here: Bonds usually have less risk versus stocks, which means they usually generate lower returns versus stocks. Because Treasury bonds are typically safer than other bonds, that also means investors will likely see lower returns.

When financial advisors talk about asset allocation within a portfolio, it means investment dollars are spread among three main asset classes, or groups of similar investments. Stocks generally provide the greatest long-term growth potential but are the most volatile. Bonds can generate income and compared to stocks, usually have more modest returns and can help balance out volatility. Cash has the least risk and lowest return to buffer volatility or cover unexpected expenses.

Limited time offer. Terms apply. One risk related to bonds is credit risk, or the likelihood for the bond issuer to default or not be able to pay you back. When you purchase a Treasury bond, you are, in essence, loaning money to the federal government.

Given that the U. The Treasury Department can always raise taxes or use other methods to make good on repaying its debt to you. Another risk to understand is interest-rate risk. Like all bonds, Treasury bond prices typically have an inverse relationship with interest rates. When interest rates rise, usually bond prices come down, and vice versa. If you purchase a Treasury bond and later interest rates rise, you are locked into receiving a return less than what you would receive by buying a new bond at a higher interest rate.

So the price, or market value, of your bond falls because your bond is now worth less. You can see this play out with the returns on Treasurys under normal market conditions. That means T-bills have the lowest returns compared with T-notes or T-bonds. However, you will need a US tax identification number — usually, it's your Social Security number — and email address to set up an account. You also need to have access to a bank account in order to fund your purchases.

It's also possible to invest in Treasury securities through a financial institution, like a brokerage or bank. It is probably the easiest method since the broker will watch the US Treasury Department auctions and place your bid for you. However, depending on the institution, you may be charged a fee to place the bid. The auctions, and TreasuryDirect, only offer new issues. So if you want to buy an older T-bill, note, or bond, you have to get one that's already trading on the secondary market the major stock exchanges.

You will need to buy through a brokerage or financial services company, or an online trading platform. Commission charges may apply. You'll also need a brokerage or investment company to purchase a Treasury bond mutual fund or exchange-traded fund ETF. The big advantage of choosing a fund, as opposed to the securities themselves, is bang for the buck: You can buy fund shares for a fraction of the bonds' price.

And of course, with these funds — which own a basket of various T-bills, notes, and bonds — you get immediate diversification for the income portion of your portfolio. The maturity date of the Treasuries that you invest in will determine how liquid easily sellable your investment will be.

Treasury bills, which have maturities of a year or less, are going to be the most liquid option while year bonds will give you the least liquidity. That said, within the investment universe, Treasuries are pretty liquid animals: There's always a market for US government bonds. So you can always unload them pretty fast, though as mentioned earlier, the exact price they'll fetch depends on their coupon rate, compared to prevailing interest rates.

Since these securities are backed by the United States government, there's virtually no chance that you won't see a return on your investment. Despite ongoing concerns about the budget and deficits, the US has never defaulted on an obligation, in its entire history. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Bonds Treasury Bonds. Table of Contents Expand.

Treasury Auctions. Transferring Treasuries. Other Ways to Buy Treasuries. The Bottom Line. Investors must transfer bonds from TreasuryDirect to banks or brokerages if they want to sell the bonds before they reach maturity. Some of the other ways to buy treasuries include ETFs, money market accounts, and the secondary market. You can also do this with ETFs.

It is not possible to open tax-advantaged retirement accounts at TreasuryDirect. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

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Investopedia does not include all offers available in the marketplace. Related Articles. Fixed Income Essentials Where can I buy government bonds? Treasury Bonds Treasury Bonds vs. Treasury Notes vs. Treasury Bills. Partner Links. Competitive Tender Competitive tender is an auction process through which large institutional investors also called primary distributors purchase newly issued government debt.

Treasury and backed by the U. A certificate of deposit CD is a bank product that earns interest on a lump-sum deposit that's untouched for a predetermined period of time. It also includes information about yourself, including your names, telephone number, CDS account number, and whether the funds you are investing are coming from a local or offshore source. On the application form, you have two options for selecting a rate, which determines how much you will pay for the bill and, therefore, what your return will be when the bill matures.

The Central Bank then decides what bids it will accept and determines a cutoff. Investors who submitted interest rates above that cutoff do not receive Treasury bills from that auction. The final section on the application form is the Rollover Instructions. To easily facilitate re-investment, investors with maturing bills and bonds can use their returns to purchase further government securities.

Get the Auction Results. While investors will typically receive Treasury bills in the amount they applied for, the Central Bank can issue bills for a lower amount.

Following the auction, investors need to call or visit the Central Bank or its branches to determine if their applications were successful and to determine how much they owe for their Treasury bills.

If you have submitted an application, it is extremely important that you contact the Central Bank to determine what your payment will be, as you will need to make that payment by 2pm on the following Monday or, if the Monday is a public holiday, the following Tuesday.

The payment period for an auction typically closes on the following Monday at 2pm. Successful applicants who fail to submit payments within the payment period can be barred from future investment in government securities. Maturity Proceeds:.