T-bills
Is the interest on a T-Bill earned monthly or on maturity. For example I bought a $50,000.00, 17 week T-bill which auctioned at 4.69 %. If the interest is earned at maturity, I figure I will earn $2345.00 after 17 weeks. If I had bought a $50000.00, 4 week Bill which auctioned at 4.012%, I figured I would have earned $2006.00, and then I could have rolled that over say 4 (16 weeks) times at supposedly close to the same interest rate I end up with approximately $6000.00. So back to my question are the T-bill interest earned monthly or at maturity?
Terry Says
Neither! The interest on T-bills is paid UP FRONT! When you purchased your T-bills (for example let’s say you bought $10,000 in bills) you probably noticed they didn’t take the full $10k out of your checking account. The difference between what they took and the $10k face value is the interest — left there for you to spend or earn interest on!
If those T-bills are set to automatically roll over at maturity, the interest will drop into your linked checking account on the day of that auction, and will continue to do so as long as you keep rolling over.
If you didn’t choose a rollover, then at maturity the original $10,000 will drop back into your checking account.
