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.
- You can typically cash in your T-bill or choose to reinvest the money into a new T-bill.
Lisa S. Kramer is a licensed attorney practicing civil litigation and estates and trusts law in southern Florida. She received her Bachelor of Arts in English from the University of Florida, where she graduated Phi Beta Kappa and cum laude. Kramer earned her Juris Doctor from the University of Florida Levin College of Law.