Glossary · Bonds and rates
Treasury bills
Treasury bills are short loans to the US government, from 4 weeks to a year. You buy them below face value and get the full amount at the end.
Also called: T-bills, T-bill, US Treasury bills
November 10, 2026. 1-month: 4.05%; 6-month: 4.38%.
In plain words
Imagine buying a $100 gift card for $99 that you can spend in three months. You earned $1 just by waiting. A Treasury bill works the same way: you pay a little less than its face value today, and the US government pays you the full face value when it matures.
Bills are the shortest Treasuries, from 4 weeks to 52 weeks. They pay no coupon: the gap between the price and the face value is the interest. A 3-month bill yields 4.30% a year now (November 10, 2026).
Because they are so short, their price barely moves when rates change, and their yield follows the Fed’s key rate closely. That makes them the closest thing to cash that pays interest, and money market funds hold huge amounts of them.
Example
How a T-bill’s yield is worked out
- You buy a 13-week (91-day) bill with a $1,000 face value for $990.
- In 91 days you get $1,000: you earned $10, which is 1.01% of the $990 you paid.
- Over a year that is about 1.01% × 365 ÷ 91 = 4.05%, the bill’s investment yield.
- Bill rates are also quoted on an old “discount” basis: $10 ÷ $1,000 × 360 ÷ 91 = 3.96%, a little lower.
The investment yield is the one to compare with a savings account or a bond.
One level deeper
The Treasury sells bills at auctions every week and uses them to manage its cash: it issues more when it needs money quickly and fewer when tax receipts roll in. Since bills mature within a year, that part of the debt is refinanced again and again at the going rate.
Their yield is the market’s best reading of where the federal funds rate is heading over the next few months. The 3-month bill is also the usual “risk-free rate” in finance, the return that needs no risk at all, used in measures like the Sharpe ratio.
The 3-month rate peaked at 16.3% in May 1981, when the Fed fought double-digit inflation. After 2008 and again in 2020 it sat near zero, for about 9 years in all.
The 3-month Treasury bill rate since 1934
What the US government paid to borrow for three months, month by month: near zero in the 1930s and 1940s, a peak of 16.3% in May 1981, and near zero again after 2008 and in 2020.
The numbers behind the chart
| Date | 3-month Treasury bill rate |
|---|---|
| Jan 1934 | 0.7% |
| Dec 1940 | 0.0% |
| Dec 1950 | 1.3% |
| Dec 1960 | 2.2% |
| Dec 1970 | 4.9% |
| Dec 1980 | 15.5% |
| Dec 1990 | 6.7% |
| Dec 2000 | 5.8% |
| Dec 2010 | 0.1% |
| Dec 2020 | 0.1% |
| Dec 2022 | 4.2% |
| Dec 2023 | 5.2% |
| Dec 2024 | 4.3% |
| Dec 2025 | 3.6% |
| Oct 2026 | 4.0% |
Why it matters
T-bills are where much of the world’s spare cash waits: money market funds, companies and central banks park money in them.
Their yield is the baseline for earning interest without risk. A savings account paying much less than T-bills pays you less than the government would.
Over the long run they have only about kept pace with prices. Rolling 3-month bills since 1934 earned 3.5% a year, a little less than the 3.6% a year that consumer prices rose.
A common mistake
Myth: T-bills pay no interest because they have no coupon.
In fact: They pay interest by being sold at a discount: the difference between the price and the face value. A bill bought for $990 that pays $1,000 in 13 weeks earns about 4% a year.
Questions people ask
How do you buy Treasury bills?
At the weekly auctions through TreasuryDirect, the Treasury’s own website, with as little as $100 (as of 2026), or through most brokers, which also sell bills between auctions. Many money market funds hold mostly T-bills.
Are T-bills taxed?
The interest is subject to federal income tax but exempt from state and local income taxes, which matters in high-tax states.
What is the T-bill rate today?
The 3-month bill yielded 4.30% on November 10, 2026, the 1-month bill 4.05% and the 6-month bill 4.38%.
Read more on BigCapital
About the numbers
- The numbers on this page are recalculated from the data every night; the sources are listed at the end of the page.
- US recessions (NBER business cycle dates): National Bureau of Economic Research (NBER), Business Cycle Dating Committee: US Business Cycle Expansions and Contractions.
- Consumer price index, all items (CPI-U), not seasonally adjusted: U.S. Bureau of Labor Statistics, Consumer Price Index, series CPIAUCNS; retrieved from FRED, Federal Reserve Bank of St. Louis.
- 3-month Treasury bill, secondary market rate: Board of Governors of the Federal Reserve System, H.15 Selected Interest Rates, series TB3MS; retrieved from FRED, Federal Reserve Bank of St. Louis.
- US Treasury par yield curve rates: U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates (Interest Rate Statistics).
- The chart uses the Fed’s 3-month bill rate (discount basis, monthly since 1934); the live numbers use the Treasury’s daily yield curve (bond-equivalent basis), which runs slightly higher.
- The long-run return of rolling bills holds each month’s 3-month rate for one month, before taxes; consumer prices are the CPI-U, not seasonally adjusted.
- This page explains a term. It is not investment advice.