A Treasury bill ladder is a set of T-bills bought with staggered maturities, so that part of your money comes due every few weeks or months and can either be spent or rolled into a new bill. To build one, split your cash into equal amounts, buy bills of different terms (for example 4, 8, 17, 26 and 52 weeks), and reinvest each one as it matures. At Treasury auctions between September 29 and October 15, 2026, bills paid investment rates from 4.068% (4-week) to 4.616% (52-week). Below is a worked $50,000 ladder using those actual auction results, how to read the rates, the tax advantage, and the mistakes to avoid.
Recent T-bill auction results
All figures are the high (stop-out) results from Treasury auctions, published in the Treasury's Fiscal Data auctions dataset. Price is per $100 of face value.
| Term | Auction date | Price per $100 | Discount rate | Investment rate | Matures |
|---|---|---|---|---|---|
| 4-week | Oct 15, 2026 | $99.688889 | 4.000% | 4.068% | Nov 17, 2026 |
| 8-week | Oct 15, 2026 | $99.370000 | 4.050% | 4.132% | Dec 15, 2026 |
| 13-week | Oct 13, 2026 | $98.967403 | 4.085% | 4.185% | Jan 14, 2027 |
| 17-week | Oct 14, 2026 | $98.613319 | 4.195% | 4.313% | Feb 16, 2027 |
| 26-week | Oct 13, 2026 | $97.876667 | 4.200% | 4.351% | Apr 15, 2027 |
| 52-week | Sep 29, 2026 | $95.551111 | 4.400% | 4.616% | Sep 30, 2027 |
The curve is gently upward-sloping: the 52-week bill paid 0.548 points more than the 4-week (4.616 minus 4.068). Locking money up longer earned a little more, but not much.
Discount rate vs investment rate: which number to use
T-bills pay no interest coupon. You buy them below face value and receive the full face value at maturity; as TreasuryDirect puts it, "when the bill matures, you are paid its face value." The difference is your interest.
Treasury quotes two rates, and the gap between them confuses many buyers. Take the 26-week bill sold on October 13, 2026, which was issued on October 15 and matures on April 15, 2027, 182 days later:
- Discount rate (4.200%) measures the discount against face value on a 360-day year: ($100 - $97.876667) / $100 x 360 / 182 = 4.200%.
- Investment rate (4.351%) measures your return on the money you actually paid, on a 365-day year: ($100 - $97.876667) / $97.876667 x 365 / 182 = 4.351%.
Use the investment rate when comparing a T-bill with a savings account, CD or money market fund. It is the comparable, bond-equivalent figure, and it is always higher than the discount rate.
A worked example: a five-rung, $50,000 ladder
Suppose you want cash coming due regularly over the next year and buy $10,000 of face value in each of five terms, at the auction prices above.
| Rung | Cost for $10,000 face | Interest earned | Cash returned on |
|---|---|---|---|
| 4-week | $9,968.89 | $31.11 | Nov 17, 2026 |
| 8-week | $9,937.00 | $63.00 | Dec 15, 2026 |
| 17-week | $9,861.33 | $138.67 | Feb 16, 2027 |
| 26-week | $9,787.67 | $212.33 | Apr 15, 2027 |
| 52-week | $9,555.11 | $444.89 | Sep 30, 2027 |
| Total | $49,110.00 | $890.00 |
Each cost is $10,000 x price / 100; for the 52-week, $10,000 x 95.551111 / 100 = $9,555.11. The $890.00 is the interest over the life of each rung, not a year's income: the 4-week rung earns its $31.11 in 28 days, then has to be reinvested.
Because the dates above come from different auction days, a real buyer starting today would see slightly different prices and maturities. The structure is what matters: something matures within a month, something within two, and so on out to a year.
Keeping the ladder going
When a rung matures, you have three choices: spend the money, roll it into the same term, or extend it to the longest rung. Two common ways to run a ladder:
- Short rolling ladder. Keep buying 4-week or 13-week bills each week or month. You always have money coming due soon, but your rate resets constantly.
- Extend-to-the-end ladder. As each rung matures, buy a new 52-week bill. After a year, every rung is a 52-week bill, one maturing roughly every few months, each bought at the longest (and currently highest) rate.
Timing is set by the auction calendar. Per TreasuryDirect, 4-, 6-, 8-, 13-, 17- and 26-week bills are auctioned weekly, while 52-week bills are auctioned "every four weeks." The most recent 52-week auction was on September 29, 2026.
Reinvestment is also where the risk lies. Rates move: the 4-week investment rate was 3.956% at the October 1, 2026 auction and 4.068% on October 15, a rise of 0.112 points in two weeks. A ladder does not protect you from falling rates; it spreads your reinvestment over many dates so that no single day's rate decides your income.
The tax advantage, and where to buy
T-bill interest is subject to federal income tax, but TreasuryDirect states plainly: "No state or local taxes." For savers in high-tax states this is a real advantage over bank CDs and savings accounts, whose interest is usually taxed by the state. In an illustrative state with a 5% income tax, the $890.00 of interest in the example above would save $890.00 x 5% = $44.50 in state tax. Your rate will differ.
You can buy bills in two ways:
- TreasuryDirect, the Treasury's own site, with a minimum of $100 and increments of $100, buying at auction.
- A brokerage account, either at auction or on the secondary market. A broker makes it simpler to sell a bill before maturity. TreasuryDirect notes you can "hold a bill until it matures or sell it before it matures," but a bill sold early fetches the market price that day, which may be above or below what you paid.
Mistakes to avoid
- Comparing the discount rate with a bank's APY. Compare the investment rate instead.
- Forgetting inflation. A 4.3% bill is only a real gain if inflation runs below that. The consumer price index rose 0.65% in September 2026 alone, according to Financial Modeling Prep data; we covered that report in our September CPI story.
- Treating a ladder as a growth investment. It is a tool for cash you will need within a year or two, not for long-term savings.
- Letting maturities pile up unplanned. If the rungs mature on dates you do not need cash, the ladder is not doing its job. Match the rungs to your known spending.
For how bill yields compare with longer Treasuries, mortgages and dividend stocks, see what 5% Treasury yields mean for your money. Daily coverage of rates is in the Economy section and on the Wall Street Conservative front page.
FAQ
What is the minimum to start a T-bill ladder?
TreasuryDirect sells bills from $100, in $100 increments, so a five-rung ladder can start at $500. Most ladders use larger, equal amounts per rung.
What do T-bills pay right now?
At auctions between September 29 and October 15, 2026, investment rates ranged from 4.068% for 4-week bills to 4.616% for 52-week bills. Rates change at every weekly auction.
Are T-bills taxed?
The interest is subject to federal income tax but exempt from state and local income tax, according to TreasuryDirect.
Is a T-bill ladder better than a money market fund?
A ladder locks in each rate until that rung matures and gives you exact maturity dates; a money market fund's yield changes daily but lets you withdraw at any time. Many savers use a fund for day-to-day cash and a ladder for money with a known future use.