Treasury bills on Fidelity: the basic path

You can buy Treasury bills directly through Fidelity's website or mobile app without paying a commission. Log into your account, navigate to the Fixed Income section, select Treasury Bills, choose the maturity date and amount you want, and complete the purchase in the same way you would buy a stock. The whole process takes about five minutes once you have cash in your account.

Treasury bills are short-term loans to the U.S. government that mature in four weeks, eight weeks, thirteen weeks, or twenty-six weeks. You buy them at a discount to their face value — meaning you pay less than $10,000 for a bill worth $10,000 at maturity — and the difference is your interest. Fidelity lets you buy bills in $100 increments with no trading fees.

The main reason to buy through Fidelity rather than directly from the Treasury is convenience. You can hold Treasury bills alongside your stocks and mutual funds in one account, set up automatic reinvestment, and see everything in one statement. The trade-off is that Fidelity's rates are identical to the Treasury's rates — you are not paying more, but you are not getting a better deal either.

Key Takeaways

  • Treasury bills are purchased at a discount and mature in four to twenty-six weeks, with no commission charged by Fidelity.
  • You need at least $100 in cash in your Fidelity account to make your first purchase, and bills are sold in $100 increments.
  • Fidelity offers the same rates as the U.S. Treasury, so buying through Fidelity costs you nothing extra but does not give you a better rate.
  • You can set up automatic reinvestment so that when a bill matures, the proceeds automatically buy a new bill of the same maturity length.

Where to find Treasury bills in your Fidelity account

Open Fidelity.com or the Fidelity mobile app and log in. On the web, click "Trade" in the top menu, then select "Fixed Income" from the dropdown. On the mobile app, tap the menu icon and choose "Trade," then "Fixed Income." Both routes take you to the same screen.

Once you are in Fixed Income, look for the "Treasury Bills" option. Fidelity groups it separately from longer-term Treasury bonds and notes because the purchase process is slightly different. Click or tap "Treasury Bills" to see the current offerings.

You will see a list of available bills organized by maturity date. The maturity date tells you when the Treasury will pay you back the full face value. Next to each bill, Fidelity shows the discount rate (the percentage you save by buying at less than face value) and the investment amount you need. Choose the maturity that fits your timeline — if you need the money in two months, pick the thirteen-week bill rather than the twenty-six-week bill.

Steps to complete your first Treasury bill purchase

Click on the Treasury bill you want to buy. A window will open showing the details: the maturity date, the discount rate, and the amount you are investing. Enter the dollar amount you want to invest in the "Investment Amount" field. Remember that bills are sold in $100 increments, so you can buy $100, $200, $1,000, or any multiple of $100 up to your available cash balance.

Fidelity will show you the purchase price (what you pay today) and the face value (what you receive at maturity). The difference between these two numbers is your earnings. Review this information carefully — the purchase price is what gets deducted from your account when ready, not the face value.

Click "Preview Order" to see a summary. Check that the investment amount, maturity date, and settlement date are correct. The settlement date is usually the next business day. Once you confirm, click "Submit Order" and the purchase is complete. Fidelity will send you a confirmation email within minutes.

What happens when your Treasury bill matures

On the maturity date, Fidelity automatically deposits the full face value into your account's cash balance. You do not have to do anything — the money straightforward appears. This usually happens before the market opens, so you will see it in your account the morning of the maturity date.

At this point you have three choices: buy another Treasury bill, invest the money elsewhere, or leave it in cash. If you want to buy bills repeatedly without having to log in each time, you can set up automatic reinvestment. When a bill matures, Fidelity will use the proceeds to buy a new bill with the same maturity length automatically.

To set up automatic reinvestment, go back to the Treasury Bills section and look for the "Reinvestment" or "Automatic Investment" option. You can choose which maturity length you want to reinvest in — for example, always reinvest in thirteen-week bills even if your original bill was twenty-six weeks. This is useful if you want a steady stream of maturing bills without managing each purchase manually.

Minimum investment and account requirements

You need at least $100 in available cash in your Fidelity account to buy your first Treasury bill. This $100 is the minimum investment amount; you cannot buy a $50 bill. If you have $500 in cash, you can buy one $500 bill or five $100 bills, but not a $250 bill.

Your account type does not matter — you can buy Treasury bills in a taxable brokerage account, an IRA, a 401(k) if your plan allows it, or a custodial account for a minor. The rules are the same across all account types. If you have multiple Fidelity accounts, you can buy bills in each one separately using the cash in that specific account.

There is no maximum investment amount. You can buy $10,000, $100,000, or more in a single purchase, as long as you have the cash available. Fidelity does not limit how many bills you can hold at once.

Tax reporting for Treasury bills on Fidelity

The interest you earn on Treasury bills is subject to federal income tax but not state or local income tax. When a bill matures, Fidelity does not send you a separate 1099 form for each bill — instead, the interest from all your Treasury bills appears on a single Form 1099-INT that Fidelity mails to you by January 31 of the following year.

The interest amount is the difference between what you paid and what you received at maturity. If you bought a bill for $9,950 and it matured for $10,000, your interest is $50. This $50 goes on your tax return as interest income, not as a capital gain.

Keep records of your purchases and maturity dates, especially if you buy multiple bills throughout the year. Fidelity's account statements show all your Treasury bill transactions, so you can use those as backup documentation if the IRS ever asks questions.

Frequently Asked Questions

Can I sell a Treasury bill before it matures?

Yes. You can sell a Treasury bill on the secondary market through Fidelity before the maturity date, but the price will fluctuate based on interest rates. If rates have risen since you bought the bill, you will sell it for less than you paid. If rates have fallen, you will sell it for more. Fidelity charges a small transaction fee for secondary market sales, typically $1 to $2.

What is the difference between buying Treasury bills on Fidelity versus TreasuryDirect?

TreasuryDirect is the U.S. Treasury's own website where you can buy bills directly with no fees and no middleman. The rates are identical to Fidelity's. The main difference is that TreasuryDirect is slower (purchases take longer to settle) and you cannot hold other investments there. Fidelity is faster and more convenient if you already have a brokerage account, but TreasuryDirect is the lowest-cost option if you only want to buy bills.

Do I pay state income tax on Treasury bill interest?

No. Interest from Treasury bills is exempt from state and local income tax in all fifty states. You only owe federal income tax on the interest. This makes Treasury bills slightly more tax-efficient than bonds issued by corporations or municipalities, depending on your state's tax rate.

What happens if I do not have enough cash to buy the bill I want?

You can deposit money into your Fidelity account by bank transfer, check, or wire. Bank transfers typically take one to three business days to settle. Once the cash appears in your account, you can buy Treasury bills when ready. You cannot buy bills on margin or with borrowed money.

Can I buy Treasury bills in a retirement account?

Yes, you can buy Treasury bills in a Traditional IRA, Roth IRA, SEP IRA, or most employer-sponsored 401(k) plans that allow self-directed investing. The purchase process is the same, and the interest is not taxed until you withdraw the money from the account (or never, in the case of a Roth IRA). Check with your plan administrator if you are unsure whether your 401(k) allows Treasury bill purchases.