In 2023 the 3-month T-bill paid more than any other Treasury. Today it pays less than almost all of them.

The Treasury publishes a daily yield for eleven maturities, from one month out to thirty years. On 1 June 2023 the 3-month bill was the highest-yielding of all eleven. On 29 September 2026 only the 1-month bill pays less than it does. Nothing about the bill itself changed — it is the same contract, with the same guarantee, from the same issuer. What changed is everything it sits next to. That is why “is now a good time to buy a T-bill” has an answer that does not require predicting anything.

Start here: what a Treasury bill actually is

A Treasury bill is a loan you make to the US federal government for a year or less. It works differently from most things that pay interest, and the difference is worth thirty seconds.

A bill pays no interest. You buy it for less than it is worth and you are paid the full amount at the end. A 13-week bill with a face value of $10,000 might cost you $9,895 today; thirteen weeks later the Treasury sends you $10,000. The $105 difference is the interest. That is what “sold at a discount” means, and it is why a bill has no coupon, no payment schedule and nothing to reinvest along the way.

Bills, notes and bonds are the same promise over different lengths. Bills run 52 weeks or less. Notes run two to ten years and pay interest twice a year. Bonds run twenty or thirty. All three are backed by the same issuer, so they carry the same credit risk — which is the lowest available in dollars. They do not carry the same price risk, and that distinction is the whole article.

Bills come in six lengths — four, eight, 13, 17, 26 and 52 weeks. The short ones are auctioned every week, the 52-week every four weeks. At TreasuryDirect the minimum is $100 and you buy in $100 steps, so this is not a large-account product. A brokerage will also sell you bills on the secondary market, usually in $1,000 steps.

One more thing that matters and never appears in the yield: interest on a Treasury bill is exempt from state and local income tax. It is fully taxable federally. If you live somewhere with a high state income tax, a bill at 4.25% can keep more of itself than a bank CD or a prime money-market fund paying slightly more.

The same curve, three years apart

Put both dates on one picture and the question answers itself. In June 2023 the line slopes down: the less time you committed, the more you were paid. Today it slopes up, the way a yield curve normally does.

This is the single most useful chart for anyone deciding how long to lend money. In 2023 committing for ten years cost you 1.89 points a year in forgone yield, so a bill was both the best-paying Treasury and the safest one to own. Today committing for ten years pays you 1.01 points a year. The bill is still the safest. It is no longer the best paid, and those two facts have come apart.

What the bill itself did

The headline rate on cash is down a long way from its peak — and has turned back up.

The low was 3.62%, touched on 18 and 19 December 2025 and again on 7, 8 and 9 January 2026. A bill buyer today is getting 63 basis points more than anyone who bought nine months ago, and 138 basis points less than anyone who bought at the October 2023 peak. Both are true, and which one feels important depends entirely on which number you anchored to.

The price of staying short, in one line

Subtract the 3-month bill from the 10-year note and you get the number that decides what a bill costs you. When it is negative, a bill pays more than a ten-year loan and you give up nothing to stay liquid. When it is positive, that is the annual rent on your flexibility.

Everything written about T-bills between 2022 and 2025 was written inside the dip in that chart, when cash paid the most and risked the least. That was not normal. It was the most inverted the curve had been in four decades, and it has now undone itself.

The bill didn’t get worse. Everything else got better paid.

The four questions that actually decide it

None of these requires a forecast. All four are answerable from numbers published every afternoon.

1. When do you need the money? This is the one that settles most cases, and it has nothing to do with the curve. If you need the cash inside a year — a tax bill, a house deposit, a buffer you might actually draw on — a bill matures when you need it and hands back exactly the amount printed on it. A 10-year note paying 5.26% does not help you in March, because in March you have to sell it to someone, at whatever price exists that morning. A bill held to maturity has no price. It has a date.

2. What is the curve charging you? The 10-year-minus- 3-month spread is the fee, and it is +1.01 points. Lending for three months instead of ten years costs you about a point a year right now. In 2023 that same choice paid you 1.89 points a year, which is why cash was an easy call then and is a real trade-off now.

3. Which way is your reinvestment going? A bill matures fast, so you will buy another one, and the rate you get is whatever exists then. The curve tells you which direction the market has priced. The fed funds effective rate is 3.88%; the 1-month bill is 4.04%, the 3-month 4.25%, the 6-month 4.36% and the 1-year 4.58%. Short lending now pays more than overnight money and more the longer you go. That shape appears when the market expects the overnight rate to be higher later. In 2024 and early 2025 it was the other way round — bills sat below fed funds, cuts were priced, and each roll paid less than the last. Today the roll is priced to improve, not decay.

4. Does the real yield clear your bar? 4.25% nominal minus 3.35% inflation for the year to August 2026 leaves 0.90 points of actual purchasing power. At the bill’s October 2023 peak the same arithmetic gave 2.38 points, because 5.63% nominal met 3.25% inflation. The headline barely moved from “over 4%” to “over 5%” and back, but what you keep fell by more than half.

$10,000 for one year, at today’s prices

The same money, lent for different lengths, at the yields quoted on 29 September 2026. The spread between the shortest and the longest is $101 a year on $10,000 — about a dollar a week.

A hundred dollars a year is what the whole argument is worth on a $10,000 position. On $250,000 it is $2,525 a year, which is why this choice gets more agonising the more money is involved — and why, below some balance, matching the maturity to when you need the cash is simply the better use of your attention.

What this means for your money

A 3-month bill bought on 29 September 2026 returns 4.25% annualised, with certainty, in an instrument that matures in thirteen weeks and owes no state income tax. That is a good absolute deal and it is the worst relative deal in roughly three years. Both halves are the point.

The 1.01 points the 10-year pays over the bill is not free money — it is the fee for taking price risk. If the curve is right that rates are heading higher, that is precisely the circumstance in which a long note loses value, and a buyer who needs the cash early eats the loss. The bill’s weakness and its strength are the same property: it is too short to go wrong and too short to pay much.

The behaviour worth noticing is on the other side. Money-market fund assets reached $8.44 trillion on 1 April 2026, up 12.8% from $7.48 trillion a year earlier — a quarterly figure, five months older than the yields on this page. Money kept arriving in cash while the yield on cash fell 138 basis points from its peak and the rest of the curve overtook it. Whatever the right answer is, the amount of money choosing cash is not evidence about it.

If you came here from our survey of 54,860 box spreads, this is the other side of that coin: a box spread is a synthetic Treasury bill, so the bill’s rate is the ceiling on what the box can pay, and the bill gets there in one trade instead of four. And if you sell cash-secured puts, the collateral sitting behind each put is the same cash a bill would hold — worth checking what your broker pays on it, because at 4.25% the gap is not rounding.

Data appendix

Every figure in this post, with the date it was read and the series it came from. Treasury yields are constant-maturity rates and the 29 September 2026 readings were the latest available across all maturities when this was written.