3 Month Tbill Overview and Investment Insights

The 3-month Treasury bill, also known as the 3-month T-bill, is a short-term debt obligation issued by the US government.

It has a maturity period of exactly 3 months, or approximately 90 days.

Investors can buy T-bills at auction, and the minimum investment is $100.

The 3-month T-bill is a low-risk investment option, offering a return that is essentially the same as the current federal funds rate.

The return on a 3-month T-bill is typically around 1-2% annually, depending on market conditions.

Investors can also buy T-bills through a broker or online, making it a relatively accessible investment option.

The 3-month T-bill is a liquid investment, meaning that investors can easily sell or redeem their investment before maturity.

Additional reading: Where to Buy Us Treasury Bonds

The U.S. Treasury sells 3-month Treasury bills through a schedule of regular public auctions. These auctions determine the yield of the securities, and the Treasury makes periodic adjustments to the auction calendar as its borrowing needs change.

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The Treasury announces the amount to be auctioned several days before the upcoming issue. This is usually done through a public announcement.

Competitive and noncompetitive bids are accepted in these auctions. Competitive bids are generally placed by dealers and other institutions, while noncompetitive bids are limited to $10 million per security per household in one auction.

Competitive and noncompetitive bidders receive the same rate or yield at auction.

The 3 month T-Bill is a short-term investment option that's less exposed to interest rate fluctuations compared to longer duration securities.

This is because it has a short duration of 1-3 months, which means its value is less affected by changes in interest rates.

The SPDR Bloomberg 1-3 Month T-Bill ETF is designed to track the Bloomberg 1-3 Month U.S. Treasury Bill Index, which includes all publicly issued U.S. Treasury Bills with a remaining maturity of less than 3 months and at least 1 month.

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The Index is market capitalization weighted, which means the securities with the largest market value have a greater impact on the overall performance of the Index.

Here are some key features of the SPDR Bloomberg 1-3 Month T-Bill ETF:

When you're investing, fees can add up quickly. Vanguard Brokerage Services doesn't charge a commission for any Treasury order.

The SPDR Bloomberg 1-3 Month T-Bill ETF is designed to track the performance of the Bloomberg 1-3 Month U.S. Treasury Bill Index.

This ETF seeks to provide exposure to publicly issued U.S. Treasury Bills with remaining maturities between 1 and 3 months.

One of the key benefits of this ETF is its short duration, which means it's less exposed to fluctuations in interest rates compared to longer duration securities.

The ETF is rebalanced on the last business day of the month to ensure it remains aligned with the benchmark index.

Here are some key features of the SPDR Bloomberg 1-3 Month T-Bill ETF:

The interest rate for the 3-month T-bill in the United States is 0.24% p.a. as of January 15, 2025.

This rate is based on secondary market data and is not seasonally adjusted. It's a crucial figure for investors and financial planners to keep in mind.

The interest rate has been steadily decreasing, with a rate of 4.22% on January 14, 2025, and a rate of 4.21% on January 15, 2025.

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The current 3-month T-bill interest rate in the US, as of January 15, 2025, is 4.21%.

This rate is based on data from the secondary market and is not seasonally adjusted.

The interest rate is expressed on a discount basis, meaning it's the rate at which the face value of the T-bill is discounted to its purchase price.

To give you a better idea, here's a simple breakdown of the interest rate:

As you can see, the interest rate has been slightly increasing over the past day.

The constant maturity series is a way to estimate yields on Treasury securities, even if there's no exact matching security with the same maturity. This is done by interpolating from the daily yield curve for non-inflation-indexed Treasury securities.

The U.S. Treasury uses the closing market bid yields on actively traded Treasury securities to create this curve. These yields are calculated from composites of quotations obtained by the Federal Reserve Bank of New York.

The constant maturity yield values are read from the yield curve at fixed maturities, currently 1, 3, and 6 months and 1, 2, 3, 5, 7, 10, 20, and 30 years. This method provides a yield for a 10-year maturity, for example, even if no outstanding security has exactly 10 years remaining to maturity.

Inflation-indexed securities are also included in the constant maturity series, with yields interpolated from the daily yield curve for Treasury inflation protected securities. The inflation-indexed constant maturity yields are read from this yield curve at fixed maturities, currently 5, 7, 10, and 20 years.

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