How much does Vanguard charge to buy T-bills?
Vanguard Brokerage Services® doesn't charge a commission for any Treasury order.
Buy Treasury bills through a broker or financial advisor
The broker or advisor will typically charge a fee for their services, thereby making it more expensive than buying T-bills directly through TreasuryDirect.
| Assets invested in Vanguard ETFs & mutual funds | Online |
|---|---|
| Less than $1 million | $20 per trade |
| $1 million to $5 million | $0 for first 25 trades;* $8 per trade thereafter |
| $5 million or more | $0 for first 100 trades;* $8 per trade thereafter |
| Compare the Best Online Brokers | ||
|---|---|---|
| Fidelity Investments | Best Overall and Best for Low Costs | 4.8 |
| TD Ameritrade | Best for Beginners and Best Mobile App | 4.5 |
| Tastytrade | Best for Options | 3.8 |
| Interactive Brokers | Best for Advanced Traders and Best for International Trading | 4.6 |
When the bill matures, you are paid its face value. You can hold a bill until it matures or sell it before it matures.
6 Month Treasury Rate is at 5.38%, compared to 5.39% the previous market day and 5.09% last year. This is higher than the long term average of 2.83%. The 6 Month Treasury Bill Rate is the yield received for investing in a US government issued treasury security that has a maturity of 6 months.
To calculate the price, take 180 days and multiply by 1.5 to get 270. Then, divide by 360 to get 0.75, and subtract 100 minus 0.75. The answer is 99.25. Because you're buying a $1,000 Treasury bill instead of one for $100, multiply 99.25 by 10 to get the final price of $992.50.
Buy T-Bills in a Brokerage Account
Investors who wish to purchase T-bills for individual retirement accounts must go through their broker, as it is not possible to fund an IRA via TreasuryDirect. Investors can also buy T-bills in the secondary market, although purchasing new issues is generally a wiser option.
Bills are sold in increments of $100. The minimum purchase is $100. All bills except 52-week bills and cash management bills are auctioned every week.
Vanguard charges no closing, transfer or inactivity fees. There is a $20 annual account service fee for all brokerage accounts and IRAs that is easily waived for clients who sign up for statement e-delivery.
What are the disadvantages of a Vanguard brokerage account?
- Higher options contract fee than other discount brokerages (Vanguard charges $1 per options contract)
- No separate trading platforms for advanced traders; no fractional shares.
- No cryptocurrencies.
While Fidelity wins out overall, Vanguard is the best option for retirement savers. Its platform offers tools and education focused specifically on retirement planning.
Buffett takes an entirely different approach. Berkshire held more than $360 billion of stocks, $167 billion of cash (mostly Treasury bills), and just $24 billion of bonds at the end of 2023.
Taxes: Treasury bills are exempt from state and local taxes but still subject to federal income taxes. That makes them less attractive holdings for taxable accounts. Investors in higher tax brackets might want to consider short-term municipal securities instead.
| ETF | Expense Ratio | Yield to maturity |
|---|---|---|
| Global X 1-3 Month T-Bill ETF (CLIP) | 0.07% | 5.5% |
| iShares 20+ Year Treasury Bond ETF (TLT) | 0.15% | 4.4% |
| iShares 20+ Year Treasury Bond BuyWrite Strategy ETF (TLTW) | 0.35% | 4.4% |
| Schwab U.S. TIPS ETF (SCHP) | 0.03% | 4% |
T-Bill Tax Considerations
The interest income that you may receive from investing in a treasury bill is exempt from any state or local income taxes, regardless of the state where you file your taxes. However, you will need to report interest income from these investments on your federal tax return.
1 Year Treasury Rate is at 5.18%, compared to 5.16% the previous market day and 4.84% last year. This is higher than the long term average of 2.95%. The 1 Year Treasury Rate is the yield received for investing in a US government issued treasury security that has a maturity of 1 year.
However, income earned from Treasury bills is not subject to state tax or local income taxes. Are Treasury bills taxed as capital gains? Normally no. However, if you buy a T-bill in the secondary market and then achieve a profit, you may be liable for capital gains depending on your exact purchase price.
| Bonds | Yield | Year |
|---|---|---|
| US 52W | 5.17 | 0.407% |
| US 2Y | 5.00 | 0.827% |
| US 3Y | 4.83 | 0.954% |
| US 5Y | 4.68 | 1.037% |
To calculate yield, subtract the bill's purchase price from its face value and then divide the result by the bill's purchase price. Finally, multiply your answer by 100 to convert it to a percentage.
How do I get my 6 month T bill?
You can only buy T-bills in electronic form, either from a brokerage firm or directly from the government at TreasuryDirect.gov. (You can also buy Series I savings bonds through TreasuryDirect.gov.)
You can buy (bid for) Treasury marketable securities through: your TreasuryDirect account — non-competitive bids only. a bank, broker, or dealer — competitive and non-competitive bids.
The minimum amount that you can purchase of any given Treasury Bill, Note, Bond, TIPS, or FRNs is $100.
$10 million each in 4-, 8-, 13-, 26-, and 52-week Treasury bills, $10 million each in 2-, 3-, 5-, 7-, and 10-year Treasury notes, $10 million in 30-year Treasury bonds, $10 million in 2-year Floating Rate Notes, and $10 million each in 5-, 10-, and 30-year Treasury TIPS.
On occasion, the Treasury will re-use a previously issued cusip for treasury bill auctions. All US Treasury auction orders placed online on Fidelity.com are free of charge. If you prefer to place your trade through a representative, a $19.95 service fee will be charged.
