T-Bills are short term treasury bills and in this video I explain what T-Bills are, show you how to find the highest T-Bill rates and also how to buy them. Treasury Direct T-Bill Rates: https://treasurydirect.gov/auctions/announcements-data-results/ Introduction 00:00:00 T-Bill Rates 00:01:19 How to Calculate T-Bill Rates 00:04:31 How to Buy T-Bills 00:05:49 Bills – Notes – Bonds T-Bills – Short Term - 4 weeks to a year so this is why they’re a great short term solution. Notes - Medium Term – 2-10 years Bonds – Long Term – 20-30 Years With government issued securities, generally the longer the term, the higher the interest rate. But this isn’t always the case. If you bought a 30 year bond 2 years ago, it would have an interest rate of only 1.2%! This is because interest rates have been increasing recently so this is why Short Term T-Bills can be a great option to get the most up to date rates. T-Bills also have shorter terms which can be as low as 4 weeks; this means that your money isn’t tied up for a long period of time. This can be extremely useful if you have an emergency where you need some cash or you have an investment opportunity that you want to take advantage of. You can buy T-Bills in $100 increments they are guaranteed by the US Government and while T-bills are subject to federal tax, they are not subject to state and local taxes. You can buy them through Treasury Direct or also through a bank or broker. Personally I like to buy them through TD because there aren’t any middle men involved and you will get the most updated rates. https://treasurydirect.gov/ How to set up Treasury Direct Account: https://youtube.com/watch?v=M-0SSYqhw3Q&feature=share&si=EMSIkaIECMiOmarE6JChQQ&t=133 One interesting thing about T Bills is, is that if buy a $100 worth, you don’t actually pay $100. You pay that amount, minus the interest you will earn. For example, I bought a 4 week T Bill last week for $100.00 and it has an interest rate of 3.25% for the entire year. So if I held onto it for 1 year, I would earn $3.25 but because it was for only 4 weeks I will earn: How to Calculate T Bill Rates: Amount Invested x Interest Rate $100.00 x 3.25% = $3.25 Divided by 52 weeks in a year Divided by 4 weeks (Term of the T Bill) = 13 $3.25/13 = $0.25 So for this 4 week bill, I will earn $0.25 meaning that I will only pay $99.75 for the bill now, and I will get $100.00 once the bill matures. This is obviously a tiny amount of money, but this is just an example. Let’s say buy $100,000 worth, this means you would only pay $99,750 and you would get the full $100,000 worth in just 4 weeks. So you would have made $250 in 4 weeks for money that might be just sitting around in an account not making any interest or making very little interest. T bills can be a great option for short term returns but if you want to get a higher rate than you can consider I Bonds by watching this video: https://www.youtube.com/watch?v=M-0SSYqhw3Q&ab_channel=MinimalistMike If you enjoyed this video please consider liking and subscribing. You can also read the full article here: https://www.minimalistmike.com/how-and-why-to-buy-t-bills-a-guide-to-short-term-treasury-investments/ Thanks for watching!