T bills
Q. Would I be smarter buying $20,000 in 4 week t bills for 6 months or buy one $20,000 t bill for 6 months.
2. What is the federal tax rate for t bills?
Terry Says
You’ll get a significantly higher rate for purchasing 26 week- 6 month T-bills at this time. Currently it looks like the next Monday auction will yield around 4.7%, reflecting the Fed’s continued push to raise rates.
The interest you earn on T-bills is added to your ordinary income and taxed at your marginal rate. You’ll get a 1099 from Treasury showing the interest you earned for the year. There is NO state income tax on interest earned on Treasury securities.