3 reasons to buy T-Bills yourself instead of through your bank

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You don’t need a bank to invest in T-bill.

Treasury bills, or T-bills, are a popular investment option for both individuals and businesses. These are low-risk, highly liquid investments that can provide investors with a steady stream of income. Banks also often sell his T-bill to customers, but buying directly from the US Treasury has several advantages. Learn more about short-term government bonds and how they work.

What are government bonds?

The US government offers investors five types of Treasury bonds. Treasury Bills, Government Bonds, Treasuries, Inflation Protected Securities (TIPS), and Floating Rate Notes (FRN). They are backed by the full trust and credit of the U.S. government, so they are considered very safe investments and are popular among investors looking to maximize returns while minimizing risk. Let’s look at the details of each.

• government bond Short-term securities with maturities ranging from 4 to 52 weeks. They are issued at a discounted price and are redeemed at face value at maturity. In other words, when you buy a T-bill, you pay less than its face value. As it ages, it receives an amount for the entire face.
• Government bonds (government bonds) Long-term securities with maturities of 20 or 30 years. Interest is paid semi-annually and the principal is repaid at maturity.
• Government bonds (T notes) Medium-term securities with maturities of 2 to 10 years. Interest is paid semi-annually and the principal is repaid at maturity.
• Treasury Inflation Protection Securities (TIPS) Helps protect against inflation, TIPS principal can rise with inflation and fall with deflation.
• Floating Rate Note (FRN) It is a short-term investment that pays quarterly interest and matures in two years.

Each type of security can be bought and sold on the secondary market from stock brokers, making them highly liquid investments. We also offer investors a variety of maturities so you can find one that fits your investment goals and timeline. Here are some of the benefits you get when you buy your T-bill directly from the US Treasury:

1. Reduce fees and expenses

When you buy government bonds through your bank, you may be charged additional fees and costs such as sales and transaction fees. These extra costs can add up over time and erode your return on investment. Buying direct from the US Treasury eliminates these additional fees, so you can get more money back in monthly or quarterly interest payments.

2. Get what you want

There are two ways to purchase treasury bills: uncompetitive and competitive bidding. If you bid non-competitively through TreasuryDirect.gov, you are guaranteed to receive the interest rate determined by the auction and get the security you want for the amount you want. To make a competitive bid, you must work through a bank, brokerage firm, or dealer. Competitive bidding selects the interest rate you want. However, depending on the outcome of the auction, the government bonds may not arrive. Even if you get it, it may be less than what you want. For example, if the rate set in the auction is 1.5% and you bid at 1.75%, your bid will be rejected.

3. Lower the lower bound

Some banks may have a higher minimum amount for buying a T-bill. For example, Fidelity, like many other banks and brokerage firms, has a $1,000 minimum. The minimum purchase amount for self-purchasing a T-bill is $100.

Investing in treasury bills is an attractive way for investors to earn a steady income without taking on undue risk in their portfolio, but when investing in these government bonds, be sure you are getting the best possible deal. It is important to make sure that For those looking for maximum return with minimal effort, buying Treasury bonds directly from the U.S. Treasury has several advantages over going through banks and other intermediaries.