Treasury bills on Fidelity: the basic steps

You can buy Treasury bills directly through Fidelity using either their website or their mobile app. The process takes about five minutes once your account is set up. You'll search for the specific Treasury bill you want, enter the amount you wish to purchase, and confirm the order — Fidelity handles the rest, including settlement and holding the bill until maturity.

Treasury bills are short-term government debt that mature in four weeks, eight weeks, thirteen weeks, or twenty-six weeks. You buy them at a discount to their face value and receive the full face value when they mature, with the difference being your return. Because they're backed by the U.S. government, they carry virtually no default risk, which is why many investors use them as a safe place to park cash.

Fidelity charges no commission to buy Treasury bills, and you don't need a minimum balance to get your free guide. The minimum purchase is typically $100, though some auctions may require $1,000 minimums depending on the specific bill.

Key Takeaways

  • You can purchase Treasury bills through Fidelity's website or mobile app by searching for the bill you want, selecting your purchase amount, and confirming the order.
  • Fidelity charges no commission on Treasury bill purchases, and the minimum investment is usually $100.
  • Treasury bills mature in four, eight, thirteen, or twenty-six weeks, and you receive the full face value at maturity regardless of what you paid upfront.
  • You can buy Treasury bills in your regular brokerage account, IRA, or other Fidelity account types without special setup.

Finding and selecting Treasury bills on Fidelity

Log into your Fidelity account and navigate to the "Fixed Income" or "Bonds" section. You'll see a search tool where you can filter for Treasury bills specifically. Fidelity displays each bill's maturity date, current yield, and price so you can compare options before you buy.

The yield shown is what you'll earn if you hold the bill to maturity. Fidelity updates available bills regularly as new auctions occur, typically on Mondays and Thursdays when the U.S. Treasury holds its auctions. If you don't see a bill with the maturity date you want, check back in a few days — new options appear frequently.

When you select a bill, Fidelity shows you the exact price you'll pay and the amount you'll receive at maturity. This transparency lets you see your return before you commit. You can also set up alerts if you want Fidelity to notify you when bills matching certain criteria become available.

Placing your Treasury bill order

Once you've chosen a bill, click "Buy" or "Add to Order" depending on which platform you're using. Fidelity will ask you to confirm the dollar amount you want to invest. Remember that you're buying at a discount, so if a bill's face value is $10,000 and it's priced at $9,950, you'll pay $9,950 now and receive $10,000 at maturity.

Select which Fidelity account you want the bill to settle into — your taxable brokerage account, an IRA, a college savings account, or any other account you hold with Fidelity. Review the order summary one final time, then submit. Fidelity will confirm the purchase immediately, and the bill will appear in your holdings within one business day.

If you're buying during an active auction period, your order may be placed as a competitive or non-competitive bid. Fidelity typically handles this automatically on your behalf, and you'll receive confirmation of the exact price once the auction settles.

Understanding settlement and holding your Treasury bills

Treasury bills settle on the issue date, which is typically the Thursday after the auction. This means the money leaves your account and the bill appears in your holdings on that date. You don't need to do anything — Fidelity manages the settlement automatically.

While you hold the bill, it will appear in your Fidelity account showing the maturity date and current value. You can sell the bill before maturity if you need the cash, though you'll receive whatever the current market price is rather than the full face value. If you hold it to maturity, Fidelity will deposit the full face value into your account on the maturity date.

Fidelity also allows you to reinvest your proceeds automatically. If you want to buy another Treasury bill with the money you receive at maturity, you can set that up in advance so the process happens without your intervention.

Tax treatment of Treasury bill earnings

The earnings you make on a Treasury bill — the difference between what you pay and the face value you receive — are subject to federal income tax but exempt from state and local income tax. This is true regardless of which type of Fidelity account you hold the bill in.

If you hold the bill in a traditional IRA or Roth IRA, the earnings are not taxed in the year you earn them. If you hold it in a taxable brokerage account, you'll owe federal tax on the earnings in the year the bill matures, even though you don't receive the money until maturity.

Fidelity will report your Treasury bill earnings on a Form 1099-INT at tax time if the earnings exceed $10. Keep records of your purchase price and maturity proceeds so you can verify the amount reported.

Comparing Treasury bills to other short-term options on Fidelity

Treasury bills are one way to invest short-term money, but Fidelity also offers money market funds, short-term bond funds, and high-yield savings accounts. Money market funds hold a mix of very short-term securities and often have higher yields than individual Treasury bills, though they carry slightly more risk because they're not government-backed.

High-yield savings accounts through Fidelity offer competitive rates and your money is always accessible, but the yield typically changes monthly. Treasury bills lock in a fixed rate for the duration of the bill, so if rates fall, you keep earning the higher rate you locked in.

If you're trying to decide between these options, consider how long you can leave the money invested and whether you might need access before maturity. Treasury bills work best if you have a specific time horizon in mind and won't need the cash before the bill matures.

Troubleshooting common issues when buying Treasury bills

If you see a message that a Treasury bill is "unavailable" or "sold out," it means that particular bill has reached its purchase limit for the day or auction period. New bills become available regularly, so you can search for a different maturity date or wait for the next auction cycle.

If your order is rejected, check that you have sufficient cash in your account to cover the purchase price. Treasury bills must be paid in full at settlement, so Fidelity reserves the funds immediately when you place the order. If you don't have enough cash, deposit money into your account first.

If you're having trouble finding Treasury bills in the Fidelity interface, make sure you're looking in the Fixed Income section rather than the stock search tool. You can also call Fidelity's customer service line — they can walk you through the process or place an order for you over the phone if you prefer.

Frequently Asked Questions

Can I buy Treasury bills in a Fidelity IRA?

Yes. Treasury bills can be held in traditional IRAs, Roth IRAs, SEP IRAs, and most other IRA types that Fidelity offers. The earnings are not taxed in the year you earn them, which can make IRAs a tax-efficient place to hold Treasury bills if you're in a high tax bracket.

What happens if I sell a Treasury bill before it matures?

You'll receive the current market price, which may be higher or lower than what you paid depending on interest rate changes. If rates have risen since you bought the bill, you'll likely receive less than you paid. If rates have fallen, you may receive more. Fidelity charges no commission on the sale.

How do I know what yield I'm getting on a Treasury bill?

Fidelity displays the yield for each bill before you buy. This is the annualized return you'll earn if you hold the bill to maturity. For example, a four-week bill with a 5% yield will earn roughly 0.38% over those four weeks.

Can I set up automatic purchases of Treasury bills?

Fidelity does not offer automatic recurring purchases of Treasury bills the way some platforms do. However, you can set up alerts to notify you when new bills matching your criteria become available, and you can reinvest your proceeds when bills mature.

Do I need a minimum account balance to buy Treasury bills on Fidelity?

No. You can buy Treasury bills with any account balance as long as you have at least $100 (or $1,000 for certain bills) in cash available. There is no minimum account balance requirement.