Ask Terry Questions T-Bill Re newal Process

T-Bill Re newal Process

By Terry Savage on November 01, 2023 | Chicken Money

We follow your advice on WGN radio regarding T-Bill purchase, but the reinvestment process confuses us. We understand the purchasing process, but the multiple renewals at different dates gets confusing. Can you recommend a resource with information to help us understand the statements on how to see which the time when T-Bills renew and when the principal comes back to your bank account?

Terry Says

You just log in to your TreasuryDirect account and then click on the “holdings” section. You’ll see all your T-bills and their maturity dates. There is also a box that indicates the number of automatic renewals you have chosen. And if that box says “zero” it means all the money for that T-bill will drop back into your checking account at maturity. You can easily add more renewals — 2 or 3 — in that box. Then, if the T-bill is going to renwew at maturity, only the interest will drop into your linked checking account.
It’s always a nice surprise to see a deposit of interest land in your account! Sort of an unexpected present! (The Treasury also sends you an email, reminding you to check for a message in your TD account. That message informs you that your bill rolled over and gives you the new “purchase price.”

So it’s very easy to keep track of maturities and create automatic rollovers. You don’t know the rate you’ll get, but it’s always very close to the rate at which T-bills are trading that morning of the auction (T-bill auctions are held on Mondays at midday, except on holidays). To find current T-bill trading rates just go to CNBC and click on Markets and then on “bonds.”



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