Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
Updated August 3, 2026. Quick answer: a T-bill pays no coupon — you buy below face value and receive face value at maturity. For cash you will need on a known schedule, the useful mechanic is that bills can be scheduled for repeat reinvestment for up to two years, which notes and bonds cannot.
How a bill works
“Bills are sold at a discount or at par (face value). When the bill matures, you are paid its face value.” There is no periodic payment; the return is the spread between what you pay and what you receive.
Maturities: 4, 6, 8, 13, 17, 26, and 52 weeks.
Auction cadence: Weekly for 4, 6, 8, 13, 17 and 26-week bills; every four weeks for 52-week bills.
Minimum: Minimum purchase $100, in increments of $100.
Buying at auction without setting a price
“The maximum award to any noncompetitive bidder is $10 million. This limit does not apply to bidders bidding solely through a request to reinvest the proceeds of a maturing security held directly with Treasury.” (31 CFR 356.22(a).)
For an individual this is the whole mechanism: you say how much, not at what rate, and you are guaranteed the award. Note the second sentence — the cap does not apply to a bid that is purely a reinvestment of a maturing security held directly with Treasury.
The reinvestment rule, which is the ladder
“notes, bonds, and FRNs can only be scheduled for one reinvestment. bills may be scheduled for multiple reinvestments, up to two years.”
That asymmetry is the point. A four-week bill can be set to roll repeatedly within the two-year ceiling, so a rolling short-dated position can be established once and left, whereas a note or bond has to be re-established after a single roll.
A scheduled reinvestment can be changed or cancelled as long as it is more than four business days before the new auction. — so a scheduled roll is not a commitment, provided you act before that window.
What a ladder is, mechanically
Holdings whose maturity dates fall on consecutive dates, so a portion comes due on a known schedule rather than all at once. Because a bill held to maturity pays its face value on a fixed date, the amount available on each date is known when the rung is bought, regardless of what happens to rates in between.
What moves is the rate on each new rung. Rolling a maturing bill means accepting whatever the next auction clears at, which is a genuine variable and not one anyone can forecast.
Where this sits against other places to hold cash
The comparison points that are actually verifiable are the mechanical ones: a bill has a fixed maturity date and a known face value; a deposit account does not have a maturity but carries deposit insurance; a brokerage cash position is a different arrangement again. Where larger cash balances can sit, how brokerage cash is treated, and how deposit insurance limits work at scale.
Treasury interest is exempt from state and local income tax under 31 U.S.C. § 3124(a). That exemption is broader and more precise than most summaries make it, and it has a mirror image in how municipal bonds are treated — the breadth clause and what it actually covers.
Related: the inflation-indexed, longer-dated version.
Whether the ladder is worth running rather than leaving the money where it is comes down to a comparison, and in a state with an income tax the state layer decides it more often than the headline yield does. The T-bill vs CD after-tax calculator takes the bill yield you would be rolling at and the CD APY on offer, with your state and local marginal rates, and returns the CD yield that would be needed to tie that bill after tax — along with which of the two wins at the numbers you entered.
General information drawn from IRS, Medicare, HUD and state statute and regulation, not legal, tax or financial advice. Continuing-care law is state law and differs materially between states; every figure here is year-labelled and every source named. Fiduciary licensing, executor compensation and intestacy are STATE law and differ change. Rates and limits are year-labelled and move; verify current terms at treasurydirect.gov before acting. Nothing here is a prediction or a recommendation about any investment – it describes how these instruments work.