How to Buy Treasury Bills Through Your Fidelity Account

Treasury bills on Fidelity: the basic steps

You can buy Treasury bills directly through Fidelity's website or mobile app without paying a commission. Log into your account, navigate to the Fixed Income section, select Treasury Bills, choose your maturity date and amount, and confirm your purchase. The entire process takes about five minutes once you have cash in your account.

Treasury bills are short-term government debt that mature in four weeks, eight weeks, thirteen weeks, or twenty-six weeks. Fidelity lets you buy them at auction prices set by the U.S. Department of the Treasury, which happens every week. You do not need a separate Treasury Direct account — Fidelity handles the purchase and holds the bills in your brokerage account.

Key Takeaways

• Treasury bills on Fidelity cost nothing to buy and are purchased at the weekly Treasury auction price, with no markup or commission.
• You need cash in your Fidelity account before you can buy; the money is held until settlement, which occurs three business days after purchase.
• Fidelity offers four maturity lengths — four weeks, eight weeks, thirteen weeks, and twenty-six weeks — and you can buy new bills every week.
• When your bill matures, Fidelity deposits the full face value into your account automatically; you do not have to do anything.
• You can sell a Treasury bill before it matures on Fidelity's secondary market, though the price will fluctuate based on interest rates.

Where to find Treasury bills in your Fidelity account

Open Fidelity.com or the Fidelity mobile app and log in. On the web, click "Trade" in the top menu, then select "Fixed Income" from the dropdown. On the mobile app, tap the menu icon, then go to "Investing" and choose "Fixed Income." Both routes take you to the same screen.

Once in Fixed Income, look for the "Treasury Bills" tab or link. Fidelity displays current offerings with their maturity dates, discount rates, and the investment amount. The rates change weekly after the Treasury auction closes, usually on Monday afternoons. If you do not see Treasury bills listed, make sure you are in the Fixed Income section and not the bond or stock sections.

What you need before you buy

Your Fidelity account must have cash available to invest. If you have only stocks or mutual funds, you need to deposit money or sell holdings first. The cash sits in your money market fund or settlement account until you purchase the bills.

You also need to know how much you want to invest. Treasury bills are sold in increments of $100, with a minimum purchase of $100. There is no maximum, though very large purchases may take longer to process. Fidelity will show you the exact price and yield before you confirm, so you can see exactly what you are buying.

The purchase process step by step

After you navigate to Treasury Bills, select the maturity date you want. Fidelity shows you the discount rate (the yield you will earn) and the purchase price. For example, a thirteen-week bill might show a 5.30% discount rate. Click on that bill to open the purchase screen.

Enter the dollar amount you want to invest in increments of $100. Fidelity calculates the actual purchase price automatically — you pay less than face value, and the difference is your return. Review the details: the maturity date, the amount, the yield, and the settlement date (always three business days after purchase). Click "Preview Order" to see a final summary, then "Submit" to complete the purchase.

Your order is placed immediately, but the money does not leave your account until settlement day. On settlement day, Fidelity deducts the purchase price from your cash balance and the Treasury bill appears in your holdings.

How maturity and repayment work

When your Treasury bill reaches its maturity date, the U.S. Treasury pays Fidelity the full face value. Fidelity automatically deposits that amount into your account — you do not have to do anything. The deposit appears as cash in your money market fund or settlement account, and you can then reinvest it, withdraw it, or leave it sitting.

If you bought a $10,000 bill at a discount, you paid less upfront (for example, $9,870). When it matures, you receive the full $10,000. The $130 difference is your interest, and it is taxed as ordinary income in the year the bill matures, not when you bought it.

Selling a Treasury bill before maturity

You can sell your Treasury bill on Fidelity's secondary market before the maturity date if you need the cash. Click on the bill in your holdings, select "Sell," and Fidelity shows you the current market price. That price changes based on interest rates — if rates have risen since you bought it, the price will be lower; if rates have fallen, the price will be higher.

Selling takes one to two business days to settle. You will owe capital gains tax on any profit or can deduct any loss. Most people hold Treasury bills to maturity because the gains are small and selling adds complexity, but the option exists if your situation changes.

Fees and costs

Fidelity charges no commission to buy or sell Treasury bills. You pay only the price set by the Treasury auction — there is no markup. This is one of the main advantages of buying through Fidelity instead of a bank, which often adds a fee.

If you sell before maturity, you may pay a small bid-ask spread (the difference between the buy and sell price), but this is a market cost, not a Fidelity fee. Holding to maturity eliminates this cost entirely.

Frequently Asked Questions

Can I set up automatic reinvestment when my Treasury bill matures?

Fidelity does not offer automatic reinvestment of Treasury bills. When your bill matures, the cash lands in your account and you must manually purchase a new bill if you want to reinvest. You can do this immediately after maturity or wait for a different maturity date.

What is the difference between the discount rate and the yield?

Treasury bills are quoted as a discount rate, which is the percentage below face value you pay. The yield is slightly higher because it accounts for the shorter time period. Fidelity shows both numbers so you can compare to other investments, but the discount rate is what determines your actual purchase price.

Do I have to pay taxes on Treasury bill interest?

Yes. Treasury bill interest is taxed as ordinary income at the federal level, but it is exempt from state and local income tax. You report the interest in the year the bill matures, not when you bought it. Fidelity sends you a 1099-INT form in January showing the interest earned.

Can I buy Treasury bills in a retirement account?

Yes. You can buy Treasury bills in an IRA, 401(k) rollover account, or other Fidelity retirement account. The tax treatment is the same as in a regular account — ordinary income tax applies — but the account type determines when you can withdraw the money without penalty.

What happens if I sell a Treasury bill at a loss?

If interest rates have risen since you bought the bill, the secondary market price will be lower than what you paid. You can deduct the loss on your taxes as a capital loss, which offsets capital gains or up to $3,000 of ordinary income per year. Losses beyond that carry forward to future years.