How To Buy Treasury Bills For Beginners (Fidelity)

How To Buy Treasury Bills For Beginners on Fidelity: This video covers a complete guide on what treasury bills are and how to buy treasury bills on the primary and secondary market with examples through Fidelity. Enjoy!

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⏰ Timestamps ⏰
00:00 Intro To T-Bills
02:59 Primary Market
06:15 Secondary Market
09:50 Conclusion

📝 What is a Treasury Bill?
Treasury Bills are short-term debt securities that are issued the U.S. treasury and backed by the U.S. government, which is why they are considered a low-risk investment.

Treasury Bill Options:
The maturities, which in simple terms is the lifespan of the investment, are 4,8,13,17,26, and 52 week options.

Pros:
1. Treasury Bills rise when interest rates rise
2. Exempt from state and local taxes
3. On Fidelity you are not locked into a 45 day holding period like TreasuryDirect
4. On Fidelity it is much easier to make an account and sell the positions.
5. Treasury Bills are pretty much risk-free

Cons:
1. TreasuryDirect has increments of $100 where Fidelity is $1000
2. Treasury Bills fluctuate so understanding market conditions and how to adjust is ideal.
3. Still pay federal tax (but overall tax exemptions are better than CDs)
4. Only small allocation because other securities perform much better (Stock market average)
5. U.S. Debt Ceiling Crisis could be an issue but historically have had adjustments to fix.

Types of Purchase:
Think of the primary like buying a brand new vehicle and the secondary market is like buying a used car. The primary consist of new issued t bills and the secondary market you are buying through a bond broker. Primary market is known to be cheaper, but typically only noticeable with a large order.

Current Conditions:
Currently treasury bills are seeing higher rates for shorter terms where the typical scenario would be higher rates for longer term maturities. This is because of current market conditions because of recent interest rate hikes, where t bills for the most part directly correlate to the interest rates.

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Disclaimer: Certain links on this website lead to products or services that may earn Danny Sully an affiliate commission or referral bonus. As a member of an affiliate sales network, Danny Sully is compensated for directing traffic to partner websites, which may affect the placement or visibility of some products on this site. The information provided in this video is accurate as of its posting date, though some of the offers mentioned may no longer be active.

This content is for entertainment only and does not constitute legal, tax, or financial advice. It is for general informational purposes. The presenter is not a licensed professional. Viewers should consult their attorney, accountant, or financial advisor for advice on specific legal, tax, or financial issues.

[DannySully]

Any questions or requested videos, please let me know in the comments below! - Enjoy!

[Lego-fsde]

Need to mention that interest paid on TBills assumes a 52 week period. So if you pick a duration less than 52 weeks, your interest earned is a proration of the stated yield.

[bdkinnh]

First time watching one of your videos - very well done, high on content with no filler or fat. Thanks for taking the time to create & post!

[skyotter]

Excellent. I did not know how to buy on the primary market through Fidelity. Now I know. Thanks!

[erdrick]

Thank you. It's wild that this is under "News and Research"

[carlosg]

Great video! Thanks for making it so clear and concise. It's very much appreciated coming from a rookie T-Bill investor.

[teedtad]

Good tips! Well explained! We heard a commission charge if drawn out early. So fed taxes always or commission charges then maybe only 3 percent earned from a buyer! Right?! Explain plse!! 😮

[MdRahman-jwvg]

Thanks for the video. I just placed an order for T-Bill today on fidelity. Trying to learn more about T-bill, T-Note, T-Bond market.

[huiliu]

it is very useful, thank you. One thing I didn't get in the video is how to pickT bill when i go to the "new issued T bill". (shows on your video at time of 3:56) What is the difference between 0 coupon and 3.375 semi annual coupon?

[jhonnicarr]

Thanks for the video! I would love to learn more about treasury bonds in a future video :)

[js]

I have never bought bonds on the secondary market. Useful.

[NamesChuck]

This was great - thanks for the lesson!

[mattbopp]

Treasurydirect will save you some taxes vs Fidelity. Also easier to role from 1 month to the next with no downtime.

[audraogilvy]

You explain things perfectly. Thank you.

[brianm]

im not sure how to pick a monthly tbill, do i just assume that if the maturity date is in about a month that itsa monthly???

[frosty_fink]

Great video for noobies like myself! I have two questions: Where can I find the bonds I have purchased through Fidelity? I have yet to find where they "live" after purchasing. I Googled this, but couldn't figure it out. Lastly, I noticed you are able to able to auto roll the bonds when purchasing from the primary market. Is this option not available when purchasing through the secondary market? Thanks for any info!

[Freneticly]

Good video, I have been wondering how individual investors can be Treasuries. Thanks.

[mamatalu]

6:15 when you place the order, how much will you be charged? It will be face value minus the yield or what? This is where I am stuck at. I don't know how much exactly will be deducted from my account when I place the order. Let us know. thanks.

[keysame]

When fidelity T bills mature money go back to bank accounts?

[vmobile]

Like to see you build
multiple T-Bill ladders over lapping short and long term . Would this be better than savings creating constant flow of money earning intrest ?