I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

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RobZ
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Joined: Wed Oct 10, 2018 10:21 am

I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by RobZ » Thu May 02, 2019 10:02 am

I have some savings parked in SPAXX (2.07% yield) and I recently read about the concept of buying Treasury Bills (around 2.43% yield for a 4 Week right now) so I wanted to dip a toe in the water and try it.
I waited until today's auction (Thursday) per the Treasury Announcement. I logged into Fidelity at 10:15am Eastern and clicked Research > Fixed Income, Bonds & CDs > New Issues > Treasury (3), but Bills were not listed, only two entries for Notes and one for Bonds.
I wondered if I missed the auction? I could not find any info on the web about what time the auction begins, or if it can rapidly sell out, etc? Does an individual retail investor like me have a realistic shot at buying a bill at auction?
I then looked at the Treasury site and found today's 4 Week Bill CUSIP = 912796VE6. I searched for it on Fidelity, and found it would let me attempt to buy: Bid 99.789, Ask 99.791. Is this the normal way to buy from Treasury on Fidelity, or was that an offer from a 3rd party that had already acquired them from auction? Or because it shows an Ask and Bid, am I effectively seeing the Competitive bidders do the auction in real time?
I then submitted to buy a lot of 3, the minimum, as in $3,000, which executed for a price of $99.782 ($2,993.46).
I'm a little confused about the process. Did I buy bills at auction? Why didn't I see Bills listed when I clicked on the New Issues > Treasury menu?

MotoTrojan
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by MotoTrojan » Thu May 02, 2019 10:21 am

RobZ wrote:
Thu May 02, 2019 10:02 am
I have some savings parked in SPAXX (2.07% yield) and I recently read about the concept of buying Treasury Bills (around 2.43% yield for a 4 Week right now) so I wanted to dip a toe in the water and try it.
I waited until today's auction (Thursday) per the Treasury Announcement. I logged into Fidelity at 10:15am Eastern and clicked Research > Fixed Income, Bonds & CDs > New Issues > Treasury (3), but Bills were not listed, only two entries for Notes and one for Bonds.
I wondered if I missed the auction? I could not find any info on the web about what time the auction begins, or if it can rapidly sell out, etc? Does an individual retail investor like me have a realistic shot at buying a bill at auction?
I then looked at the Treasury site and found today's 4 Week Bill CUSIP = 912796VE6. I searched for it on Fidelity, and found it would let me attempt to buy: Bid 99.789, Ask 99.791. Is this the normal way to buy from Treasury on Fidelity, or was that an offer from a 3rd party that had already acquired them from auction? Or because it shows an Ask and Bid, am I effectively seeing the Competitive bidders do the auction in real time?
I then submitted to buy a lot of 3, the minimum, as in $3,000, which executed for a price of $99.782 ($2,993.46).
I'm a little confused about the process. Did I buy bills at auction? Why didn't I see Bills listed when I clicked on the New Issues > Treasury menu?
Sounds like you bought them from someone that had just gotten them. In 4 weeks you'll get $3K for your $2993.46. I am no expert but have bought at auction and sold once, and I bought them several days before the actual action/settlement. Next time I'd take a look a day or two in advance and see how things are looking.

Not sure what the proper way to do the math is but it looks like you got closer to 2.8% (which doesn't really make sense, I just took your return and multiplied by 13 to get annual yield).

You could also consider putting some funds in SPRXX for a bit more yield with minimal increase in risk. There is also a system to auto-roll t-bills os you can be hands-off.

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tfb
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by tfb » Thu May 02, 2019 10:25 am

RobZ wrote:
Thu May 02, 2019 10:02 am
Did I buy bills at auction? Why didn't I see Bills listed when I clicked on the New Issues > Treasury menu?
No. If you were trying to buy the 4-week bill, you were too late. You need to get the order in on Tuesday afternoon or Wednesday. If you were trying to buy a 3-month or 6-month bill, you were too early. You need to get the order in between Thursday afternoon and the following Monday (inclusive).
Harry Sit, taking a break from the forums.

GrowthSeeker
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by GrowthSeeker » Thu May 02, 2019 10:48 am

I also have been planning to buy my first Tbill at auction; have not done it yet.
But I notice that at the moment (11:40 am on 5/2) the only treasuries shown at Fidelity to buy at auction are the ones that were "announced" on 5/1: 3 yr, 10 yr, and 30 yr. And I notice their expected yields are 12, 13, and 7 basis points respectively LOWER than suggested in the table on the main page showing lots of bonds and lots of durations.

The Treasuries to be announced on 5/2 are not shown yet at Fidelity.

Click on "New Issues" to see the ones available to buy at auction.
Just because you're paranoid doesn't mean they're NOT out to get you.

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RobZ
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by RobZ » Thu May 02, 2019 11:53 am

tfb wrote:
Thu May 02, 2019 10:25 am
RobZ wrote:
Thu May 02, 2019 10:02 am
Did I buy bills at auction? Why didn't I see Bills listed when I clicked on the New Issues > Treasury menu?
No. If you were trying to buy the 4-week bill, you were too late. You need to get the order in on Tuesday afternoon or Wednesday. If you were trying to buy a 3-month or 6-month bill, you were too early. You need to get the order in between Thursday afternoon and the following Monday (inclusive).
I was trying to buy the 4 Week Bill. I actually looked on Tuesday 4/30 within Fidelity and there were no New Issue > Treasury > 4 Week Bills at that time. So that's why I waited until Thursday. Maybe I looked at the wrong time Tuesday. I can't find any documentation on the time of day this stuff goes live.

diy60
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by diy60 » Thu May 02, 2019 11:54 am

GrowthSeeker wrote:
Thu May 02, 2019 10:48 am
I also have been planning to buy my first Tbill at auction; have not done it yet.
But I notice that at the moment (11:40 am on 5/2) the only treasuries shown at Fidelity to buy at auction are the ones that were "announced" on 5/1: 3 yr, 10 yr, and 30 yr.
From the Treasury Direct website . . . .
https://www.treasurydirect.gov/indiv/re ... ndepth.htm

Competitive bids must be received prior to the competitive closing time, which is stated in the auction announcement. The competitive closing time for bills is normally 11:30 a.m. Eastern Time on auction day and the competitive closing time for notes, bonds, FRNs, and TIPS is normally 1:00 p.m. Eastern Time on auction day

Fidelity (and I assume all other brokerages) shuts down access a few hours prior to auction time. I have purchased TBills as late as 9am same day. As a practice you should place your orders during the announcement period but before auction day.

diy60
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by diy60 » Thu May 02, 2019 12:12 pm

RobZ wrote:
Thu May 02, 2019 11:53 am
I was trying to buy the 4 Week Bill. I actually looked on Tuesday 4/30 within Fidelity and there were no New Issue > Treasury > 4 Week Bills at that time. So that's why I waited until Thursday. Maybe I looked at the wrong time Tuesday. I can't find any documentation on the time of day this stuff goes live.
Here is your next opportunity (term, security type, announcement date, auction date, settlement date). You may have signed on too early on announcement day. You can place orders anytime of day once the announcement is posted, it doesn't have to be during market open. Also see my post up thread, brokerages shut down access some amount time before the auction time. I believe Fidelity shuts down the window 2 to 3 hours prior to auction on the day of auction.

Code: Select all

4-Week	BILL	5/7/2019	5/9/2019	5/14/2019
8-Week	BILL	5/7/2019	5/9/2019	5/14/2019
13-Week	BILL	5/9/2019	5/13/2019	5/16/2019
26-Week	BILL	5/9/2019	5/13/2019	5/16/2019
4-Week	BILL	5/14/2019	5/16/2019	5/21/2019
8-Week	BILL	5/14/2019	5/16/2019	5/21/2019
13-Week	BILL	5/16/2019	5/20/2019	5/23/2019
26-Week	BILL	5/16/2019	5/20/2019	5/23/2019
52-Week	BILL	5/16/2019	5/21/2019	5/23/2019

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tfb
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by tfb » Thu May 02, 2019 12:15 pm

RobZ wrote:
Thu May 02, 2019 11:53 am
I was trying to buy the 4 Week Bill. I actually looked on Tuesday 4/30 within Fidelity and there were no New Issue > Treasury > 4 Week Bills at that time. So that's why I waited until Thursday. Maybe I looked at the wrong time Tuesday. I can't find any documentation on the time of day this stuff goes live.
You usually see them after 3 p.m. Eastern Time on the announcement date (Tuesdays for the 4-week bill). Sometimes they show up earlier. Regardless of the exact hour, you have all day on Wednesday to place the order.
Harry Sit, taking a break from the forums.

Topic Author
RobZ
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by RobZ » Thu May 02, 2019 12:34 pm

Thanks all. That clears up a lot.
Are there tax consequences to buying from a Treasury auction vs a 3rd party which I apparently did today? Although this purchase was a nominal amount of $3000, I'd like to know what to expect if I scale this up.

anoop
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by anoop » Thu May 02, 2019 1:33 pm

If you bing/google "treasury auction schedule", you will get this as your first hit:
https://www.treasury.gov/resource-cente ... ctions.pdf
This shows the schedule of treasury auctions.
The link will stay the same, the pdf underneath changes periodically.

You have to place your order between the Announcement Date and Auction Date for a given issue.

If you call Fidelity's fixed income desk, they will walk you through the process of placing an order for an auction. Don't ask them to place the order or they will charge a fee.

Topic Author
RobZ
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by RobZ » Thu May 02, 2019 2:18 pm

anoop wrote:
Thu May 02, 2019 1:33 pm
You have to place your order between the Announcement Date and Auction Date for a given issue.
This is key. I didn't see that explained anywhere when I did my research earlier this week.

Bogleheads to the rescue!

anoop
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by anoop » Thu May 02, 2019 2:27 pm

RobZ wrote:
Thu May 02, 2019 2:18 pm
anoop wrote:
Thu May 02, 2019 1:33 pm
You have to place your order between the Announcement Date and Auction Date for a given issue.
This is key. I didn't see that explained anywhere when I did my research earlier this week.
And the dates are in the auction schedule doc.

gold99xx
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by gold99xx » Thu May 02, 2019 2:51 pm

Hello, I am in my third week of buying Treasuries at Fidelity ( just opened acct). I am a longtime Vguard user and buy T-bills regularly from them. Believe it or not its actually VERY easy on the Vanguard site. HOWEVER I will not be deterred and am using Fidelity to buy them as well, I called Fidelity to ask for a walk through my first time buying treasuries. I was connected with a very helpful person at the fixed income desk. He walked me through the process, which you did correctly. 4-week bills ( what I buy) close at 9:30 eastern time on Thursdays ( a normal non-holiday week). That is why you did not see them. As others have suggested do it sooner, although I did buy some at 9:15 am the day of in Vanguard once. Once you do it properly, it is super super easy to do again. Good Luck!

missedit
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by missedit » Thu May 02, 2019 2:54 pm

MotoTrojan wrote:
Thu May 02, 2019 10:21 am

Sounds like you bought them from someone that had just gotten them. In 4 weeks you'll get $3K for your $2993.46. I am no expert but have bought at auction and sold once, and I bought them several days before the actual action/settlement. Next time I'd take a look a day or two in advance and see how things are looking.

Not sure what the proper way to do the math is but it looks like you got closer to 2.8% (which doesn't really make sense, I just took your return and multiplied by 13 to get annual yield).

You could also consider putting some funds in SPRXX for a bit more yield with minimal increase in risk. There is also a system to auto-roll t-bills os you can be hands-off.
[deleted]

travel_a07
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by travel_a07 » Thu May 02, 2019 5:37 pm

Thank you for posting this. I thought I was the only one confused by this process.

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RickBoglehead
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by RickBoglehead » Thu May 02, 2019 6:15 pm

One can always call the Bond Desk and get all these answers.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

MathIsMyWayr
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by MathIsMyWayr » Thu May 02, 2019 11:30 pm

I buy T-bills at Fidelity and Vanguard on a regular basis. There is one important thing not to be confused. One unit is 1,000 T-bills. If you want to purchase for $10,000, you have to enter 10, not 10,000. Obviously there is a big difference between the two. :D

smectym
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by smectym » Thu May 02, 2019 11:59 pm

MathIsMyWayr wrote:
Thu May 02, 2019 11:30 pm
I buy T-bills at Fidelity and Vanguard on a regular basis. There is one important thing not to be confused. One unit is 1,000 T-bills. If you want to purchase for $10,000, you have to enter 10, not 10,000. Obviously there is a big difference between the two. :D
"One unit is 1,000 T-bills"...not sure I understand what that could even mean.

In any event, apart from whatever constraints the brokerages impose on customers attempting to place Treasury trades, Treasury itself recognizes no unit other than the minimum purchase amount for Treasury securities. The minimum used to be huge, like $10,000 to buy a single Treasury bill. Then Treasury cut the minimum to $1,000...then to $100, where I believe it sits today unless it's been reduced again.

Great that others are scaling mountains and overcoming all obstacles to purchase Treasury securities on various brokerages. I've found that the easiest way is to purchase them directly from the U.S. Treasury, so I use Treasury direct; but other Boglers say they dislike the TD website experience.

MisterMister
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by MisterMister » Fri May 03, 2019 12:02 am

MotoTrojan wrote:
Thu May 02, 2019 10:21 am
RobZ wrote:
Thu May 02, 2019 10:02 am
I have some savings parked in SPAXX (2.07% yield) and I recently read about the concept of buying Treasury Bills (around 2.43% yield for a 4 Week right now) so I wanted to dip a toe in the water and try it.
I waited until today's auction (Thursday) per the Treasury Announcement. I logged into Fidelity at 10:15am Eastern and clicked Research > Fixed Income, Bonds & CDs > New Issues > Treasury (3), but Bills were not listed, only two entries for Notes and one for Bonds.
I wondered if I missed the auction? I could not find any info on the web about what time the auction begins, or if it can rapidly sell out, etc? Does an individual retail investor like me have a realistic shot at buying a bill at auction?
I then looked at the Treasury site and found today's 4 Week Bill CUSIP = 912796VE6. I searched for it on Fidelity, and found it would let me attempt to buy: Bid 99.789, Ask 99.791. Is this the normal way to buy from Treasury on Fidelity, or was that an offer from a 3rd party that had already acquired them from auction? Or because it shows an Ask and Bid, am I effectively seeing the Competitive bidders do the auction in real time?
I then submitted to buy a lot of 3, the minimum, as in $3,000, which executed for a price of $99.782 ($2,993.46).
I'm a little confused about the process. Did I buy bills at auction? Why didn't I see Bills listed when I clicked on the New Issues > Treasury menu?
Sounds like you bought them from someone that had just gotten them. In 4 weeks you'll get $3K for your $2993.46. I am no expert but have bought at auction and sold once, and I bought them several days before the actual action/settlement. Next time I'd take a look a day or two in advance and see how things are looking.

Not sure what the proper way to do the math is but it looks like you got closer to 2.8% (which doesn't really make sense, I just took your return and multiplied by 13 to get annual yield).

You could also consider putting some funds in SPRXX for a bit more yield with minimal increase in risk. There is also a system to auto-roll t-bills os you can be hands-off.
About the math: I believe the correct formula to calculate the nominal interest rate on a four-week bond is:

(redemption price / purchase price - 1) * 365 / 28, which in OP's case is just under 2.85%

Hard to understand, though, since 4-week T-Bills are yielding between 2.41% and 2.46%. See https://www.treasury.gov/resource-cente ... =billrates

I stopped buying the 4-week T bills in favor of Vanguard's Treasury Money Market Fund (VUSXX), which has an ER of only .09%. For me that's not too much to pay to avoid the nuisance of T bills and to get the added advantage of liquidity.

anoop
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by anoop » Fri May 03, 2019 12:28 am

MisterMister wrote:
Fri May 03, 2019 12:02 am
MotoTrojan wrote:
Thu May 02, 2019 10:21 am
RobZ wrote:
Thu May 02, 2019 10:02 am
I have some savings parked in SPAXX (2.07% yield) and I recently read about the concept of buying Treasury Bills (around 2.43% yield for a 4 Week right now) so I wanted to dip a toe in the water and try it.
I waited until today's auction (Thursday) per the Treasury Announcement. I logged into Fidelity at 10:15am Eastern and clicked Research > Fixed Income, Bonds & CDs > New Issues > Treasury (3), but Bills were not listed, only two entries for Notes and one for Bonds.
I wondered if I missed the auction? I could not find any info on the web about what time the auction begins, or if it can rapidly sell out, etc? Does an individual retail investor like me have a realistic shot at buying a bill at auction?
I then looked at the Treasury site and found today's 4 Week Bill CUSIP = 912796VE6. I searched for it on Fidelity, and found it would let me attempt to buy: Bid 99.789, Ask 99.791. Is this the normal way to buy from Treasury on Fidelity, or was that an offer from a 3rd party that had already acquired them from auction? Or because it shows an Ask and Bid, am I effectively seeing the Competitive bidders do the auction in real time?
I then submitted to buy a lot of 3, the minimum, as in $3,000, which executed for a price of $99.782 ($2,993.46).
I'm a little confused about the process. Did I buy bills at auction? Why didn't I see Bills listed when I clicked on the New Issues > Treasury menu?
Sounds like you bought them from someone that had just gotten them. In 4 weeks you'll get $3K for your $2993.46. I am no expert but have bought at auction and sold once, and I bought them several days before the actual action/settlement. Next time I'd take a look a day or two in advance and see how things are looking.

Not sure what the proper way to do the math is but it looks like you got closer to 2.8% (which doesn't really make sense, I just took your return and multiplied by 13 to get annual yield).

You could also consider putting some funds in SPRXX for a bit more yield with minimal increase in risk. There is also a system to auto-roll t-bills os you can be hands-off.
About the math: I believe the correct formula to calculate the nominal interest rate on a four-week bond is:

(redemption price / purchase price - 1) * 365 / 28, which in OP's case is just under 2.85%

Hard to understand, though, since 4-week T-Bills are yielding between 2.41% and 2.46%. See https://www.treasury.gov/resource-cente ... =billrates

I stopped buying the 4-week T bills in favor of Vanguard's Treasury Money Market Fund (VUSXX), which has an ER of only .09%. For me that's not too much to pay to avoid the nuisance of T bills and to get the added advantage of liquidity.
How does this work for state income taxes? Does the 1099 show the dividends as tax-exempt, or do you end up having to figure that out?

MisterMister
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by MisterMister » Fri May 03, 2019 8:21 am

anoop wrote:
Fri May 03, 2019 12:28 am
How does this work for state income taxes? Does the 1099 show the dividends as tax-exempt, or do you end up having to figure that out?
Firstly, I forgot to mention that VUSXX has a minimum initial purchase of 50K. Sorry for that omission. There are alternatives such as VMMXX without the high minimum which provide slightly higher returns but without the state tax benefit.

As to your question about 1099, I'm afraid I can't answer because I just started using VUSXX this year. All of the interest should be state-tax exempt. But anecdotal information suggests the 1099 does NOT have clear information you can use directly. See http://socialize.morningstar.com/NewSoc ... 71648.aspx

Also you might want to search the Boglehead forum for VUSXX; there are some good threads but I didn't find a direct answer to the 1099 question.

GrowthSeeker
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by GrowthSeeker » Fri May 03, 2019 1:23 pm

OK so now, on 5/3, a new 3 mo Tbill (for auction) shows up at Fidelity.
Here are some of the details:
(The page with the large table shows 3 mo Tbills as being at 2.4%)

CUSIP 912796SC4
Maturity Date 08/08/2019
Issue Date 02/07/2019 <---- This is confusing, why Feb. rather than May?
(are all Treasuries "issued" roughly 3 months before they are actually for sale?


Price (Bid) 99.379
Price (Ask) 99.385
Ask Yield to Maturity 2.402%
Duration to Worst 0.255 <---- This seems to indicate it is a 3 month bill: is this correct?

---
[Edit] the above details were shown when I started to buy the bond and took it to the final screen just before confirmation of the order. But when you merely click on UNITED STATES TREAS BILLS ZERO CPN under "Description" I see different details:
Ask Yield to Worst 2.380% not 2.402%
Duration to Worst N/A not 0.255

Could this be more confusing?
Last edited by GrowthSeeker on Fri May 03, 2019 1:31 pm, edited 1 time in total.
Just because you're paranoid doesn't mean they're NOT out to get you.

MisterMister
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by MisterMister » Fri May 03, 2019 1:29 pm

GrowthSeeker wrote:
Fri May 03, 2019 1:23 pm
OK so now, on 5/3, a new 3 mo Tbill (for auction) shows up at Fidelity.
Here are some of the details:
(The page with the large table shows 3 mo Tbills as being at 2.4%)

CUSIP 912796SC4
Maturity Date 08/08/2019
Issue Date 02/07/2019 <---- This is confusing, why Feb. rather than May?
(are all Treasuries "issued" roughly 3 months before they are actually for sale?


Price (Bid) 99.379
Price (Ask) 99.385
Ask Yield to Maturity 2.402%
Duration to Worst 0.255 <---- This seems to indicate it is a 3 month bill: is this correct?
Not sure where you're seeing that but that is obviously a secondary market sale of a six month bond that was issued back in February.

You want to look for New Issues (there's a tab for that). Under Treasury, you'll see five new issues settling in May.

EDIT: The bond you are seeing does in fact appear to be an auction. Sometimes the treasury will reissue a bond on its remaining term. You won't know what the true interest rate is until you buy. But it should be similar to the current rate for new 13 week bills.
Last edited by MisterMister on Fri May 03, 2019 1:50 pm, edited 1 time in total.

mervinj7
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by mervinj7 » Fri May 03, 2019 1:31 pm

GrowthSeeker wrote:
Fri May 03, 2019 1:23 pm
CUSIP 912796SC4
Maturity Date 08/08/2019
Issue Date 02/07/2019 <---- This is confusing, why Feb. rather than May?
(are all Treasuries "issued" roughly 3 months before they are actually for sale?
From Wikipedia:
Like other securities, individual issues of T-bills are identified with a unique CUSIP number. The 13-week bill issued three months after a 26-week bill is considered a re-opening of the 26-week bill and is given the same CUSIP number. The 4-week bill issued two months after that and maturing on the same day is also considered a re-opening of the 26-week bill and shares the same CUSIP number. For example, the 26-week bill issued on March 22, 2007, and maturing on September 20, 2007, has the same CUSIP number (912795A27) as the 13-week bill issued on June 21, 2007, and maturing on September 20, 2007, and as the 4-week bill issued on August 23, 2007 that matures on September 20, 2007.
https://en.wikipedia.org/wiki/United_St ... securities

The maturity date is roughly 3 months from now, so this is the auction for the 3 month bill.

MisterMister
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by MisterMister » Fri May 03, 2019 1:33 pm

mervinj7 wrote:
Fri May 03, 2019 1:31 pm
...The maturity date is roughly 3 months from now, so this is the auction for the 3 month bill.
No, this is not an auction. The bond was auctioned in February (settlement). This is a secondary market resale. The buyer gets the interest on the remaining term of the six month bond.

EDIT: To be more clear, the buyer just gets paid $1000 on the maturity date. The rate of interest is not specified, but can be determined based on the settlement date for the new buyer and what he paid.

mervinj7
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by mervinj7 » Fri May 03, 2019 1:43 pm

MisterMister wrote:
Fri May 03, 2019 1:33 pm
mervinj7 wrote:
Fri May 03, 2019 1:31 pm
...The maturity date is roughly 3 months from now, so this is the auction for the 3 month bill.
No, this is not an auction. The bond was auctioned in February (settlement). This is a secondary market resale. The buyer gets the interest on the remaining term of the six month bond.

EDIT: To be more clear, the buyers just gets paid $1000 on the maturity date. The rate of interest is not specified, but can be determined based on the settlement date for the new buyer and what he paid.
Today, on Fidelity you can place an auction order for CUSIP 912796SC4. With a maturity date of 08/08/2019, it's this week's 3 month Treasury bill. It is also a reopening of the February auction for the six month bill that was issued on 02/07/2019. Similarly, in 3 months, the current 6 month T-bill with a maturity date of 08/08/2019 will be reopened for a 3 month bill auction with a maturity date of 08/08/2019. Hope that makes sense.

diy60
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by diy60 » Fri May 03, 2019 1:50 pm

MisterMister wrote:
Fri May 03, 2019 1:33 pm
mervinj7 wrote:
Fri May 03, 2019 1:31 pm
...The maturity date is roughly 3 months from now, so this is the auction for the 3 month bill.
No, this is not an auction. The bond was auctioned in February (settlement). This is a secondary market resale. The buyer gets the interest on the remaining term of the six month bond.

EDIT: To be more clear, the buyer just gets paid $1000 on the maturity date. The rate of interest is not specified, but can be determined based on the settlement date for the new buyer and what he paid.
I believe this is incorrect. The above CUSIP CUSIP 912796SC4 (Maturity Date 08/08/2019 Issue Date 02/07/2019) was originally auctioned as a 6 month T-Bill, and it is being reopened for auction as a new issue 3-month T-Bill (the remaining time to maturity). It is considered a new auction event. This is very common for T-Bills.

EDIT: I see mervinj7 beat me to the correct response.

MisterMister
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by MisterMister » Fri May 03, 2019 1:52 pm

diy60 wrote:
Fri May 03, 2019 1:50 pm
MisterMister wrote:
Fri May 03, 2019 1:33 pm
mervinj7 wrote:
Fri May 03, 2019 1:31 pm
...The maturity date is roughly 3 months from now, so this is the auction for the 3 month bill.
No, this is not an auction. The bond was auctioned in February (settlement). This is a secondary market resale. The buyer gets the interest on the remaining term of the six month bond.

EDIT: To be more clear, the buyer just gets paid $1000 on the maturity date. The rate of interest is not specified, but can be determined based on the settlement date for the new buyer and what he paid.
I believe this is incorrect. The above CUSIP CUSIP 912796SC4 (Maturity Date 08/08/2019 Issue Date 02/07/2019) was originally auctioned as a 6 month T-Bill, and it is being reopened for auction as a new issue 3-month T-Bill (the remaining time to maturity). It is considered a new auction event. This is very common for T-Bills.
Yes, and no. That CUSIP is available for auction but the original posting showed a bid/ask price. Auctions don't have those. It does appear that the CUSIP is being reopened, though.

diy60
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by diy60 » Fri May 03, 2019 2:03 pm

MisterMister wrote:
Fri May 03, 2019 1:52 pm
Yes, and no. That CUSIP is available for auction but the original posting showed a bid/ask price. Auctions don't have those. It does appear that the CUSIP is being reopened, though.
The original TBill can be purchased on the secondary market, and so it would have a bid/ask spread. The reopen is an auction and will not have a bid/ask price. These are two different types of purchases for the same CUSIP.

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tfb
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by tfb » Fri May 03, 2019 2:15 pm

GrowthSeeker wrote:
Fri May 03, 2019 1:23 pm
OK so now, on 5/3, a new 3 mo Tbill (for auction) shows up at Fidelity.
Here are some of the details:
(The page with the large table shows 3 mo Tbills as being at 2.4%)

CUSIP 912796SC4
Maturity Date 08/08/2019
Issue Date 02/07/2019 <---- This is confusing, why Feb. rather than May?
(are all Treasuries "issued" roughly 3 months before they are actually for sale?
The Issue Date doesn't matter. Just ignore it. As long as you are buying at the next auction a bill that matures on 8/8/2019, that's a 3-month bill to you. Whether somebody else bought the same bill before, how much they are paying and getting paid when they trade this today, etc., are all irrelevant to you. You will pay the price determined at the next auction. You will get the face value when the bill matures on 8/8/2019. That's all you should care about.
Harry Sit, taking a break from the forums.

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Chip Munk
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by Chip Munk » Fri May 03, 2019 2:50 pm

I recently bought some 4-week Treasury Bills for the first time. I followed the step-by-step instructions that tfb posted here:
https://thefinancebuff.com/treasury-bil ... arket.html (thank you very much Harry -- very helpful.)

Be aware that the Order Execution information from Fidelity is confusing. I bought 24 4-week bills at $1,000 each (at maturity) but the Order Execution email states:

Order to BUY 24000 bonds: 24000 bonds filled @ $99.8141

When I read that I was concerned (to put it mildly) that I had mistakenly entered "24000" as the quantity rather than 24! I logged back in to my Fidelity account and confirmed that everything was correct.

Edited to add: I was also surprised how long it took for the funds to be taken from my settlement fund to pay for these. It took about a week as I recall.
Last edited by Chip Munk on Fri May 03, 2019 3:03 pm, edited 1 time in total.

GrowthSeeker
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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by GrowthSeeker » Fri May 03, 2019 3:01 pm

Well, I went ahead and purchased one unit of the 3 month Tbill.
The mildly scary way it shows the order is:
"Buy 1,000.00 of 912796SC4 at Market (Good 'til Canceled)"
Whoa!!! Holy Moly, it looks like I bought 1,000 units so a little under $1,000,000 instead of a little under $1,000; but of course that is not what it is.
I called the bond desk just to be sure and it was one unit for a face value of $1,000.

And the sequence of clicks to get to the Treasuries for purchase at Auction is this:
Main Page
News & Research (hover, don't need to click)
Fixed Income Bonds & CDs
Bonds
US Treasury
Auction

--- regarding Auto Roll ---
Also: the fellow at the bond desk said that this particular bond (a reissue of a 6 month bond which was first issued 3 months ago, so now it is a 3 month bond) - this one will auto roll as a 3 month bond.
Just because you're paranoid doesn't mean they're NOT out to get you.

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Re: I tried to use Fidelity to buy a Treasury Bill today - did I do it correctly?

Post by Ferdinand2014 » Wed May 15, 2019 10:09 pm

GrowthSeeker wrote:
Fri May 03, 2019 3:01 pm
Well, I went ahead and purchased one unit of the 3 month Tbill.
The mildly scary way it shows the order is:
"Buy 1,000.00 of 912796SC4 at Market (Good 'til Canceled)"
Whoa!!! Holy Moly, it looks like I bought 1,000 units so a little under $1,000,000 instead of a little under $1,000; but of course that is not what it is.
I called the bond desk just to be sure and it was one unit for a face value of $1,000.

And the sequence of clicks to get to the Treasuries for purchase at Auction is this:
Main Page
News & Research (hover, don't need to click)
Fixed Income Bonds & CDs
Bonds
US Treasury
Auction

--- regarding Auto Roll ---
Also: the fellow at the bond desk said that this particular bond (a reissue of a 6 month bond which was first issued 3 months ago, so now it is a 3 month bond) - this one will auto roll as a 3 month bond.
You can also click on 'trade' , select 'fixed income', 'search inventory', 'new issues', 'treasury'

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