3 Reasons to Buy T-Bills Yourself and Not Through Your Bank

Treasury bills, or T-bills for short, are one of the safest ways to invest your money. They're backed by the U.S. government, and they pay a competitive amount. They've been offering about 4.2% to 4.8% lately, similar to what these top CDs offer.

If you want to buy T-bills, you have a couple of options. You could do so yourself on the Treasury Direct website, or you could do it through a bank or broker. While either one works, there are a few key advantages to buying T-bills yourself.

1. Save on fees and expenses

When you purchase T-bills through Treasury Direct, you're buying them straight from the U.S. Treasury. One of the biggest benefits is that there aren't any extra fees. You only pay for the T-bills you buy, meaning you get the best possible deal.

With a bank or broker, this may not be the case. Some of them could tack on extra commissions or other charges. To be fair, there are banks that won't charge you anything extra. But the easiest way to be sure is to use Treasury Direct.

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2. Lower purchase minimum

Many banks and brokers have an order minimum of $1,000 for T-bills and similar products. If you want to invest $500, you could be out of luck.

Treasury Direct has a much lower minimum of just $100. Besides investing on a budget, another time this could be important is if you want to buy multiple T-bills of different lengths. Let's say you want T-bills for 13 weeks, 26 weeks, and 52 weeks. You'd need at least $300 to buy those on Treasury Direct, compared to at least $3,000 through a bank with a $1,000 minimum.

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3. It's easy to place orders

Some people consider the Treasury Direct site to be a bit clunky, especially compared to the intuitive web platforms that online banks have. But even those who dislike it tend to appreciate the order process.

On Treasury Direct, you can check T-bill auctions and place orders well in advance of auction dates. If you go through a bank, you may not be able to place an order until a couple of days before the auction date.

You're also bidding noncompetitively when you go through Treasury Direct. With noncompetitive bidding, you agree to accept whatever T-bill rate is determined at the auction, so you're guaranteed to get the T-bill you want. If you bid competitively through a bank, you choose the interest rate you want. But if the auction results are less than your desired interest rate, you won't get a T-bill.

Banks have plenty of useful financial products. If you're looking for great high-yield savings accounts or CDs, an online bank could be the best choice. But for T-bills, it pays to go directly to the source.