treasury language — “high rate” versus average
What is the difference between ‘high rate’ & ‘investment rate’ on a given length of security term of investment?
Terry Says
Every Monday (except holidays) the Treasury auctions of 13 week and 26 week Treasury bills. The huge global banks and other institutions bid — offering to buy at a certain interest rate. The Treasury accepts enough bids to fill its borrowing needs. So some large institutions may get a “higher” rate because they bid higher.
As an INDIVIDUAL buyer, you agree to accept the “average rate” set at each week’s auction. That becomes the posted Treasury bill rate for that auction, and all individual buyers get the same rate.
