Have you ever wondered how Treasury bills actually work and why people get excited about them?

Let me break down the calculations clearly, because honestly—once you understand the method, it’s quite simple.
First, a note about Treasury bills (T-bills): they don’t pay interest like regular bonds. Instead, you buy them at a discount and receive the full face value at maturity. For example, a $1,000 Treasury bill might only cost you $985, and the difference is your profit.
From an investment perspective, you need to calculate your actual return. This process has several steps, but it’s not complicated. First, prepare your purchase price, purchase date, and maturity date.
You need to count the number of days until maturity because we want to annualize all the data—that way, we can compare different investments fairly.
The basic formula is: subtract your bill’s price from 100, then divide by the price, and multiply by 100 to get a percentage. This is your holding period yield.
Next, multiply that by 365 and divide by the number of days you held the bill. That gives you the annualized return.
Let’s illustrate with a real example. Suppose you buy a 13-week Treasury bill (91 days) at a price of 99.0.
The yield over these 91 days is approximately 1.01%.
Annualized—that is, multiplying 1.01% by 365 and dividing by 91—you get about 4.05% annual return.
When you compare this to other fixed-income options, this number is key.
This is especially useful when comparing different Treasury bills, or even government bonds versus corporate bonds.
Through annualization, you can truly see which investment fits your situation best.
Whether you’re using a Treasury bill calculator or just doing the math yourself, understanding this process helps you make smarter decisions and direct your money to better places.
The benefit of this method is: whether you’re looking at U.S. Treasury bills or similar tools like Argentine Treasury bills, the calculation approach is the same—only the specific interest rates and terms will differ.