How to Buy Treasury Bills in 2026: The Safest Investment Still Beating Inflation

Q: Can I lose money on Treasury bills?

If you hold a T-bill to maturity, you cannot lose money — the U.S. government guarantees repayment of principal. If you sell a T-bill before maturity in the secondary market, the price fluctuates with interest rates and you could sell at a slight loss or gain. The standard recommendation: only buy T-bills with money you won't need until maturity.

Q: What is the minimum to buy Treasury bills?

On TreasuryDirect.gov, the minimum purchase is $100. Through a brokerage like Fidelity or Schwab, minimums vary but are typically $1,000. T-bill ETFs like SGOV have no meaningful minimum — you can buy a single share for around $100.

Q: How are Treasury bills taxed?

T-bill interest (the difference between purchase price and face value) is subject to federal income tax in the year it matures or is sold. However, T-bill interest is exempt from ALL state and local income taxes. For investors in high-tax states like California (13.3%), New York (10.9%), or New Jersey (10.75%), this exemption can make T-bills more attractive than HYSAs on an after-tax basis.

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Benjamin Graham's investing framework rested on a fundamental idea: when you can't find stocks selling at a sufficient margin of safety, don't force it. Park your capital somewhere safe and wait.

In 2022, when Fed funds were at 0%, "safe" meant earning nothing. Investors had two choices: take risk or accept zero return. That calculus has changed. As of 2026, Treasury bills are yielding 4–4.6%. The opportunity cost of patience has dropped to nearly zero.

T-bills are also, at the federal government level, the closest thing to a risk-free investment that exists. They're backed by the full faith and credit of the United States. They're exempt from state income taxes. And they're available to anyone — directly through the government, through any major brokerage, or through ETFs that hold T-bills on your behalf.

Here's everything you need to know to start buying them.

What Are Treasury Bills?

Treasury bills (T-bills) are short-term U.S. government debt securities with maturities ranging from 4 weeks to 1 year. They're issued at a discount to face value and redeemed at face value — the difference is your return.

Example: You buy a 26-week (6-month) T-bill at $97.50 for every $100 of face value. After 6 months, the government pays you $100. Your return: $2.50 on a $97.50 investment = ~5.13% annualized. (Actual yields vary by auction.)

Available maturities: | Maturity | Auction Schedule | |----------|-----------------| | 4 weeks (1 month) | Weekly (Tuesdays) | | 8 weeks (2 months) | Weekly (Tuesdays) | | 13 weeks (3 months) | Weekly (Mondays) | | 17 weeks | Weekly (Wednesdays) | | 26 weeks (6 months) | Weekly (Mondays) | | 52 weeks (1 year) | Every 4 weeks (Tuesdays) |

The 4-week and 13-week T-bills are the most popular for investors building a rolling ladder. The 26-week typically offers slightly higher yield for a 6-month commitment.

Why T-Bills Are Worth Your Attention in 2026

Three reasons T-bills are compelling right now:

1. Yield still historically elevated
T-bill yields are tied to the Federal Reserve's federal funds rate. After the aggressive rate hikes of 2022–2023, rates remain elevated relative to the 2010–2020 era when T-bills yielded effectively nothing (0–0.25%). At 4–4.6%, you're earning a real return above current inflation.

2. State tax exemption — a hidden edge
T-bill interest is exempt from all state and local income taxes. This matters enormously if you live in a high-tax state:

| State | Income Tax Rate | T-Bill After-State-Tax Advantage | |-------|----------------|----------------------------------| | California | 13.3% | 4.5% T-bill ≈ 5.2% HYSA equivalent | | New York | 10.9% | 4.5% T-bill ≈ 5.0% HYSA equivalent | | New Jersey | 10.75% | 4.5% T-bill ≈ 5.0% HYSA equivalent | | Illinois | 4.95% | 4.5% T-bill ≈ 4.7% HYSA equivalent | | Florida / Texas (no income tax) | 0% | Equal to HYSA |

If you're in California and comparing a 4.4% HYSA to a 4.3% T-bill — the T-bill likely wins after state taxes are factored in.

3. Zero credit risk
The U.S. government has never defaulted on a T-bill in the history of the republic. There's no FDIC limit to worry about. For balances over $250,000 (the FDIC ceiling), T-bills give you risk-free protection that bank deposits can't match.

How to Buy Treasury Bills: 3 Methods

Method 1: TreasuryDirect.gov (Direct from the Government)

TreasuryDirect is the U.S. Department of the Treasury's platform for buying T-bills directly, without a broker or intermediary. You buy at auction and receive face value at maturity — no middleman.

How to set it up:

Go to TreasuryDirect.gov and create an account (you'll need your SSN, bank routing number, and a checking or savings account for funding)
Navigate to "Buy" → "Treasury Bills"
Select your maturity (4-week, 13-week, 26-week, or 52-week)
Enter the purchase amount ($100 minimum, multiples of $100)
Confirm your bank account for settlement
Submit — your bid is entered in the next available auction

Competitive vs. non-competitive bids: For individuals, always choose non-competitive. You agree to accept whatever yield the auction determines. Competitive bids are for institutions specifying a price — you can miss the auction entirely if your price isn't accepted.

Pros of TreasuryDirect:

✅ No brokerage fees or commissions
✅ Directly from the government — as direct as it gets
✅ Automatic reinvestment option (auto-roll at maturity)
✅ Interest credited directly to your bank account at maturity

Cons of TreasuryDirect:

❌ Clunky, dated website — honestly one of the worst government sites in existence
❌ Selling before maturity is very difficult (requires transferring to a broker first)
❌ No yield comparison tools or portfolio view
❌ Account setup takes 1–2 business days

Best for: Investors who are 100% certain they'll hold to maturity and want zero intermediary.

Method 2: Through a Brokerage (Fidelity, Schwab, or Others)

Most investors find it easier to buy T-bills through a standard brokerage account. Every major brokerage (Fidelity, Schwab, Vanguard, TD Ameritrade) lets you buy T-bills in the secondary market or at new issue auction.

How to buy T-bills at Fidelity:

Log into your Fidelity account
Go to "News & Research" → "Fixed Income, Bonds & CDs"
Select "New Issues" → "Treasury"
Choose your desired maturity and enter your order quantity (minimum 1 T-bill = $1,000 face value)
Select "Non-Competitive Auction" and submit

How to buy T-bills at Schwab:

Log into Schwab
Navigate to "Trade" → "Bonds & CDs"
Select "Treasury" → filter by maturity range
Choose your T-bill and submit (minimum typically $1,000)

Pros of brokerage T-bill purchases:

✅ Easy secondary market selling if you need funds before maturity
✅ Integrates with your existing portfolio view
✅ Often zero commission for Treasuries at major brokerages
✅ Auto-rollover features available
✅ Much better interface than TreasuryDirect

Cons:

❌ $1,000 typical minimum (vs $100 at TreasuryDirect)
❌ Slight price variation from buying in secondary market vs direct auction

Recommended brokerages for T-bills: Fidelity and Schwab are the gold standard for T-bill purchases. Both offer zero commission, clear yield display, and robust auto-rollover features.

Method 3: T-Bill ETFs (SGOV, BIL) — Lowest Friction

If you want T-bill-equivalent yields without auction schedules, paperwork, or minimum purchase amounts — T-bill ETFs are the answer. Two dominate the space:

iShares 0-3 Month Treasury Bond ETF (SGOV)

Holds only T-bills maturing within 3 months
Current yield: approximately 4.3–4.5%
Expense ratio: 0.09% (very low)
Share price: ~$100 (stable NAV)
Managed by BlackRock
Best for: Investors who want daily liquidity, no auction hassle, and the simplest possible T-bill exposure

SPDR Bloomberg 1-3 Month T-Bill ETF (BIL)

Similar to SGOV — holds 1–3 month T-bills
Current yield: approximately 4.2–4.4%
Expense ratio: 0.1356% (slightly higher than SGOV)
Managed by State Street
Best for: Investors who already use SPDR/State Street products and want brand consistency

SGOV vs BIL: Which should you buy?
SGOV generally wins on expense ratio (0.09% vs 0.14%) and typically has slightly higher yield. For most investors, SGOV is the default choice. The difference over a year on $10,000: about $5. Not material, but SGOV wins on the margin.

Pros of T-bill ETFs:

✅ Buy any dollar amount — even one share
✅ Trade like a stock — sell instantly during market hours
✅ No auction schedule to track
✅ Dividends paid monthly
✅ State tax treatment follows the underlying T-bill exposure (most states exempt)

Cons of T-bill ETFs:

❌ Small expense ratio (0.09–0.14%) reduces yield vs direct T-bills
❌ Capital gains/loss treatment differs from direct T-bills in some edge cases
❌ Daily price fluctuation (minor, but unlike direct T-bills which don't trade)

Best for: Investors who want T-bill exposure in a brokerage, IRA, or retirement account without managing auction purchases. Also the best option for amounts under $1,000.

The T-Bill Ladder Strategy

A T-bill ladder staggers your T-bill maturities so you have capital coming available on a regular schedule. This gives you liquidity without sacrificing yield.

Example: A Simple 4-Rung T-Bill Ladder with $20,000

| Tranche | Amount | Maturity | Roll Into | |---------|--------|----------|-----------| | Tranche 1 | $5,000 | 4-week T-bill | New 4-week on maturity | | Tranche 2 | $5,000 | 8-week T-bill | New 8-week on maturity | | Tranche 3 | $5,000 | 13-week T-bill | New 13-week on maturity | | Tranche 4 | $5,000 | 26-week T-bill | New 26-week on maturity |

Every 4 weeks, Tranche 1 matures and you reinvest (or deploy into equities if a value opportunity appears). The ladder gives you capital availability on a regular schedule while keeping most of your dry powder earning yield.

Ladder logic for value investors: Your short-duration rungs (4-week, 8-week) give you deployment flexibility when undervalued stocks appear suddenly. Your longer-duration rungs (26-week) capture slightly higher yields for capital you're less likely to need quickly.

T-Bill Tax Treatment: What You Need to Know

Federal tax: T-bill interest is taxable as ordinary income at the federal level, in the year the T-bill matures or is sold
State tax: T-bill interest is completely exempt from all state and local income taxes — this is constitutional and applies in all 50 states
No 1099-DIV: T-bills don't pay dividends. You receive a 1099-INT showing the interest income
T-bill ETFs: SGOV and BIL report income on 1099-DIV, but the state exemption still applies to the T-bill interest portion (check your ETF's tax documents for the state-exempt percentage — typically 95–100% for SGOV)
IRAs and 401(k)s: T-bill interest inside a tax-advantaged account is sheltered from both federal and state taxes until withdrawal (Traditional) or permanently (Roth)

Know Your Numbers Before You Decide

Before choosing between a T-bill ladder, HYSA, or money market fund for your dry powder — know what equities you're waiting on and at what price. Use our free intrinsic value calculator at valueofstock.com/calculator to track which stocks are approaching fair value and how much capital you'll need to deploy.

Want the Full Fixed Income Allocation Toolkit?

T-bill ladder spreadsheets, after-tax yield comparison calculators, and our dry powder deployment framework — all available at our Gumroad store.

Frequently Asked Questions

What is the current T-bill rate in 2026?

As of early 2026, 3-month Treasury bills are yielding approximately 4.3–4.6%, depending on the auction date and Federal Reserve policy. 6-month T-bills are yielding slightly higher. Check TreasuryDirect.gov or your brokerage for current auction results.

Are Treasury bills better than a high-yield savings account?

T-bills and HYSAs both offer competitive yields around 4–4.6%. Key differences: T-bill interest is exempt from state and local income taxes, T-bills have fixed terms while HYSA rates are variable. For investors in high-tax states, T-bills often win after tax.

Can I lose money on Treasury bills?

If you hold to maturity, no — the U.S. government guarantees principal repayment. If you sell before maturity in the secondary market, prices fluctuate and you could sell at a slight loss or gain.

What is the minimum to buy Treasury bills?

On TreasuryDirect.gov: $100. Through a brokerage like Fidelity or Schwab: typically $1,000. T-bill ETFs like SGOV: approximately $100 per share with no meaningful minimum.

How are Treasury bills taxed?

T-bill interest is subject to federal income tax but exempt from all state and local income taxes. This is one of the primary reasons value investors in high-tax states prefer T-bills over HYSAs.

Financial Disclaimer: This article is for educational and informational purposes only. Nothing here constitutes personalized financial, tax, or investment advice. Treasury bill yields change with every weekly auction — verify current rates at TreasuryDirect.gov. Tax treatment of T-bills and T-bill ETFs depends on individual circumstances; consult a qualified tax professional. All investing involves risk, including the possible loss of principal when selling before maturity.