t-bill interest
is a 4 week t-bill interest calculated on an APR basis? if I buy an 8 week t-bill do I get double the interest (interest for the first 4 weeks and interest for the 2nd 4 weeks).
thank you.
Terry Says
When you buy T-bills at the auction you agree to accept the average rate set by the huge global bidders on U.S. debt.
If you buy 4-week T-bills you get that rate for four weeks — and it is paid up front.
That is, if you buy a $10,000 4- week T-bill, then slightly less than $10,000 is taken out of your account. At maturity (unless you decide to rollover) the full $10k is deposited back into your bank account.
If you bought a 6-month T-bill it would have a slightly different rate because of its longer maturity. YOu would get 6 months of that interest up front, with the full purchase price being deposited back into your account at maturity.
