13-Week Treasury Bills Explained: A Complete Beginner Guide for 2026
13-Week Treasury Bills give investors a simple way to put money to work for about three months while keeping a clear maturity date in sight. A 13-week Treasury bill is a short-term U.S. government security with a 91-day term. It is generally purchased at a discount and pays its face value when it matures.
That pricing structure can feel confusing at first. You may see a Treasury bill quoted with a discount rate, investment rate, or yield rather than a traditional interest rate. Your actual return comes from the difference between what you pay and the amount you receive at maturity.
This guide breaks the process into practical steps. You’ll see how the 13-week Treasury bill auction works, how much a purchase can potentially earn, what taxes apply, where you can buy T-bills, and what happens if you want to reinvest after 91 days.
What You’ll Learn
- How 13-week Treasury bills work from purchase to maturity.
- How Treasury auctions, discount pricing, and yields fit together.
- How to estimate your dollar return on a T-bill investment.
- How federal, state, and local taxes affect Treasury bill income.
- How TreasuryDirect and brokerage accounts can be used to buy T-bills.
- What to consider before reinvesting or selling before maturity.
Quick Answer
What Is a 13-Week Treasury Bill?
A 13-week Treasury bill is a short-term U.S. Treasury security that matures in 91 days. Instead of paying regular interest every month, it is generally sold at a discount and pays its full face value at maturity. Your return is the difference between the purchase price and the amount you receive when the bill matures.
Key Takeaways
- Term: The standard 13-week bill has a 91-day maturity.
- Return: The discount between your purchase price and face value represents the bill’s interest income.
- Purchase: Investors can buy Treasury bills through TreasuryDirect or eligible banks and brokers.
- Taxes: Treasury bill interest is subject to federal income tax but is generally exempt from state and local income taxes.
- Timing: Holding the bill until maturity gives you a defined 91-day investment timeline; selling earlier can expose you to market-price changes.
13-Week T-Bills at a Glance
A 13-week Treasury bill is a short-term U.S. Treasury security with a 91-day maturity. It does not make regular coupon payments. Instead, Treasury bills are generally issued at a discount to face value, with the face value paid when the bill matures. The difference between the purchase price and maturity value represents the interest earned.
| Feature | 13-Week T-Bill |
|---|---|
| Maturity | 91 days |
| Minimum purchase | Generally $100, in $100 multiples |
| Pricing | Generally sold at a discount |
| Periodic coupon | None |
| At maturity | Face value is paid |
Think of a 13-week T-bill as a defined 91-day cash cycle. You buy the bill below its face value, hold it through maturity, and receive the face value. The difference is your interest income before taxes.
Complete Beginner Guide to 13-Week Treasury Bills
If you have never bought a Treasury bill, the basic idea is easier than the terminology makes it sound. You are lending money to the U.S. government for a short period. With a 13-week bill, that period is 91 days.
The bill has a face value, but you generally pay less than that amount when you buy it. At maturity, you receive the face value. That difference is your interest income before taxes. Treasury bills do not send you monthly or quarterly coupon payments along the way.
How a Beginner Can Approach a 13-Week T-Bill
- Choose the amount: Treasury bills are generally available in $100 increments.
- Choose where to buy: You can use TreasuryDirect or a brokerage account that offers Treasury securities.
- Enter your order: Individual investors commonly use a noncompetitive bid at Treasury auctions, accepting the auction-determined terms.
- Hold until maturity: The 13-week bill reaches maturity after 91 days, when its face value is paid.
- Decide what happens next: You can use the proceeds for another goal or reinvest them in a new Treasury security.
Don’t judge a T-bill only by its advertised rate. Look at the purchase price, maturity value, holding period, and taxes to understand what the investment means in actual dollars.
Treasury bill interest is taxable at the federal level but generally exempt from state and local income taxes.
How 13-Week Treasury Bills Work
A simple way to understand a 13-week Treasury bill is to follow it from auction to maturity. Treasury sells bills through public auctions using a single-price auction process. Individual investors can place a noncompetitive bid, which means they accept the rate or discount determined at the auction rather than choosing their own rate.
The 91-Day Process
- Auction: Treasury accepts competitive and noncompetitive bids for the bill. The auction establishes the price used for successful purchases.
- Purchase: A Treasury bill is generally sold below its face value. Your purchase price depends on the auction result and the amount of face value you request.
- Settlement: Once the purchase is settled, you own the Treasury bill electronically. TreasuryDirect draws the required funds from your designated funding source.
- Holding period: The bill remains outstanding for its 13-week term. Unlike Treasury notes and bonds, it does not make periodic coupon payments.
- Maturity: At maturity, the Treasury pays the bill’s face value. The difference between the purchase price and face value is the bill’s interest income.
For example, imagine a 13-week bill with a $10,000 face value is issued for $9,900. If you hold it until maturity, you receive $10,000. The $100 difference represents your gross interest income before taxes. This is only an illustration; the actual purchase price is set by the auction.
A Treasury bill’s quoted rate is annualized. It is not the same thing as the dollar amount you will earn over 91 days. To understand your actual return, look at the purchase price, face value, and holding period together.
Benefits and Drawbacks of 13-Week Treasury Bills
A 13-week T-bill can be useful when you want a defined short-term investment period, but it is not a perfect fit for every cash need. The biggest trade-off is between predictable maturity timing and the flexibility you may want from an ordinary savings account.
Benefits
- Short commitment: The 91-day maturity can work well for money you expect to need within a few months.
- Defined maturity value: If held to maturity, the bill pays its face value.
- Federal government security: T-bills are direct obligations of the U.S. government.
- Tax advantage: Treasury interest is generally exempt from state and local income taxes.
Drawbacks
- No regular income payments: You do not receive monthly or quarterly coupon payments.
- Cash is committed: Your money is tied to the security until maturity unless you sell it.
- Early-sale risk: Selling before maturity means accepting the prevailing market price, which can be higher or lower than your purchase price.
- Reinvestment risk: When the bill matures, a new 13-week bill may offer a different rate.
The appeal of a 13-week T-bill is its defined 91-day timeline and government backing. The main limitation is that your next investment rate is not locked in today, and selling before maturity exposes you to market pricing.
13-Week T-Bills vs. Other Short-Term Options
A 13-week Treasury bill is one of several ways to manage cash over a short period. Savings accounts, money market deposit accounts, and short-term CDs work differently. The useful comparison is not just the advertised rate. Liquidity, deposit insurance, taxes, maturity, and what happens if you need the money early all matter.
| Option | Access to Money | Protection / Backing | Tax Treatment |
|---|---|---|---|
| 13-Week T-Bill | 91-day maturity; may be sold before maturity through a bank, broker, or dealer | Direct U.S. government obligation; not FDIC-insured | Federal tax; generally exempt from state and local income taxes |
| High-Yield Savings | Generally designed for easier access to deposited cash | FDIC insurance may apply when held as an eligible deposit at an FDIC-insured bank | Interest generally subject to federal income tax |
| Money Market Deposit Account | Generally provides account access, subject to the institution’s terms | FDIC insurance may apply when eligible | Interest generally subject to federal income tax |
| Short-Term CD | Fixed term; early withdrawal may involve a penalty | FDIC insurance may apply when eligible | Interest generally subject to federal income tax |
The biggest practical difference is how you access the money. A savings account or money market deposit account is built around account access, while a CD typically asks you to accept a defined term. A T-bill has a maturity date, but because it is a marketable security, you can sell it before maturity. That sale happens at the prevailing market price, so the amount you receive can differ from what you originally paid.
Compare the entire cash arrangement rather than the headline rate alone. A 13-week T-bill offers a defined maturity and U.S. government backing, while eligible bank deposits can offer FDIC insurance and easier account access. The right comparison depends on when you need the money and how much flexibility you want.
Costs, Taxes, Risks, and Expert Tips
A 13-week Treasury bill has a fairly simple structure, but the quoted rate is only one part of the decision. Your purchase price, account costs, tax treatment, and plans for the money can all affect the result.
Costs and Taxes
- TreasuryDirect: TreasuryDirect does not charge a fee to purchase Treasury securities. A bank or broker may have its own pricing, commissions, or service terms.
- Federal tax: Interest from Treasury bills is subject to federal income tax.
- State and local tax: Treasury bill interest is exempt from state and local income taxes.
Risks and Practical Tips
- Early sale: Selling before maturity exposes you to the prevailing market price and can produce a gain or loss compared with your purchase price.
- Reinvestment: When the 91-day term ends, a new T-bill may carry a different rate.
- Check the actual numbers: Compare the purchase price, face value, holding period, and taxes instead of relying only on an annualized quoted rate.
Match the maturity date with the approximate date you expect to use the money. That can reduce the chance that you will need to sell the bill early simply because your cash need arrived sooner than expected.
Tax note: Most individual investors use the cash method for federal tax reporting, but the tax treatment of a Treasury bill can differ when it is sold before maturity or held under special circumstances. Use your Form 1099-INT and current IRS guidance when preparing your return.
Common Mistakes and a Real-Life Example
Most beginner mistakes with 13-week Treasury bills come down to three things: misunderstanding the quoted rate, overlooking the maturity date, or failing to account for taxes. A quick check before placing an order can make the numbers much easier to understand.
Common Mistakes to Avoid
- Confusing yield with a 91-day return:
The quoted Treasury rate is annualized. It should not be read as the exact percentage you will earn during the 13-week holding period. - Ignoring the maturity date:
If you need the money sooner, you may have to sell the bill before maturity at the prevailing market price. - Forgetting federal taxes:
Treasury bill interest is subject to federal income tax, although it is generally exempt from state and local income taxes. - Assuming the next bill will pay the same rate:
A new Treasury bill can have a different auction rate when your current bill matures.
Real-Life Example: A $10,000 Face-Value Bill
Suppose an investor buys a 13-week Treasury bill with a $10,000 face value for an illustrative purchase price of $9,900. If the investor holds the bill until maturity, the Treasury pays the $10,000 face value.
$9,900
$10,000
$100
For a typical cash-method individual investor who holds the bill to maturity, that $100 discount is generally reported as interest income when the bill matures. This example is illustrative only; $9,900 is not a current auction price.
Before buying, check three things together: the amount you pay, the face value you will receive at maturity, and the date you expect to need the money. That simple check can prevent many beginner mistakes.
Who Should Choose 13-Week T-Bills?
A 13-week Treasury bill may fit someone who has cash available for a short-term goal and does not expect to need it for about 91 days. The defined maturity can make it easier to coordinate the investment with a planned expense, a future purchase, or another financial decision.
A 13-Week T-Bill May Fit If You:
- Have cash you can leave invested for roughly three months.
- Want a specific maturity date rather than an open-ended savings arrangement.
- Prefer a short-term U.S. government security for money that is not needed immediately.
- Value the federal tax treatment of Treasury interest, including its general exemption from state and local income taxes.
You may need the money before the 91-day maturity date or want everyday access similar to a savings account. A T-bill can be sold before maturity, but its market price may differ from the amount you originally paid.
The key question is simple: does the 91-day timeline match the purpose and timing of your cash?
Frequently Asked Questions About 13-Week Treasury Bills
These common questions cover the basics of buying, holding, taxing, and using a 13-week Treasury bill.
1. What is a 13-week Treasury bill?
A 13-week Treasury bill is a short-term U.S. government security with a 91-day maturity. It is generally issued at a discount and pays its face value at maturity.
2. How does a 13-week T-bill make money?
You generally buy the bill for less than its face value. If you hold it to maturity, you receive the face value. The difference between your purchase price and the maturity value represents the gross interest income.
3. What is the minimum amount needed to buy a 13-week T-bill?
Treasury bills are generally offered in $100 increments. The amount actually paid depends on the bill’s auction price because T-bills are generally sold below face value.
4. Where can I buy 13-week Treasury bills?
Individual investors can buy Treasury bills through TreasuryDirect or through participating banks and brokerage firms. Brokers may also provide access to the secondary market.
5. How are 13-week Treasury bills taxed?
Treasury bill interest is subject to federal income tax but is exempt from state and local income taxes. For a typical cash-method taxpayer who holds the bill to maturity, the discount is generally reported as interest income when the bill matures.
6. Can I sell a 13-week T-bill before maturity?
Yes. Treasury bills are marketable securities and can generally be sold before maturity through a bank, broker, or dealer. The market price at the time of sale can be different from your original purchase price.
7. What happens when a 13-week T-bill matures?
At maturity, the Treasury pays the bill’s face value. You can use the proceeds for your cash needs or reinvest them in another Treasury security.
8. What should I consider before buying a 13-week T-bill?
Consider whether the 91-day maturity matches your cash timeline, whether you may need the money earlier, how the federal and state tax treatment affects you, and what rate may be available if you reinvest after maturity.
The core numbers are simple: your purchase price, the bill’s face value, and the 91-day maturity. The details that deserve extra attention are taxes, liquidity, and what you plan to do when the bill matures.
Final Verdict: What to Know Before Buying a 13-Week Treasury Bill
A 13-week Treasury bill is a short-term U.S. government security with a defined 91-day maturity. It is generally issued at a discount, and the Treasury pays the bill’s face value when it matures. The difference between the purchase price and maturity value represents the gross return for a bill held to maturity.
Before buying, look beyond the quoted annualized rate. Check the actual purchase price, the maturity date, federal tax treatment, your need for access to the money, and the rate that may be available if you reinvest after maturity.
A 13-week T-bill follows a straightforward cycle:
purchase → 91-day holding period → maturity → next cash decision.
The important question is whether that timeline matches the purpose and timing of your money.
If your plans change before maturity, a T-bill can generally be sold through a bank, broker, or dealer, but its market price at that time may differ from your original purchase price.
Have a Money Question? Keep Exploring.
A 13-week Treasury bill is one piece of a short-term cash plan. Keep exploring Treasury securities, savings options, and other personal finance topics with practical FinanceInvestment guides.
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