How to Cash in a 90 Day Treasury Bill

Treasury bills are exempt from state and local taxes.

Treasury bills are exempt from state and local taxes.

Treasury bills are short-term securities that the U.S. government sells as a way to help pay off its debt. T-bills are typically issued in 90-day, 180-day and one-year terms and sold in denominations of $1,000, $5,000, $10,000, $25,000, $50,000, $100,000 and $1 million. A person typically buys a T-bill for less money than its face value. When the T-bill matures, the government pays the holder the face value of the T-bill. For example, assume that you buy a 90-day $1,000 T-bill for $985. After 90 days, you can redeem it for its face value of $1,000, thus earning a profit of $15. The redemption process for a T-bill depends on whether it was purchased from the U.S. government's Treasury Direct website or another bank or broker.

Determine whether you purchased your 90-day T-bill from the U.S. government's TreasuryDirect website or from another bank or broker.

Wait 90 days for your T-bill to mature. If you purchased your T-bill from Treasury Direct, do nothing to redeem it. At maturity, Treasury Direct will automatically deposit the T-bill's proceeds into the bank account you designated at time of purchase.

Redeem T-bills purchased from a bank or broker by consulting with that bank or broker. Each bank or broker will have different instructions for redeeming T-bills.

Tip

  • You can typically cash in your T-bill or choose to reinvest the money into a new T-bill.

Photo Credits

  • Medioimages/Photodisc/Photodisc/Getty Images