What Happens When a Treasury Bill Matures?
Maximize interest rates with these strategies for when a Treasury bill matures.


Treasury bills – better known as T-bills – are debt securities issued by the United States Treasury with maturities of one year or less.
They are considered risk-free, as the government can always print the money to pay back the debt.
And given that they have only a short time to maturity, they have very little sensitivity to interest rate moves. If interest rates rise, the bonds don’t fall much in value.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
For the first time in the investment lives of many Americans, T-bills have been offering a competitive yield.
At the time of writing, T-bills offer yields at an annualized 4%-plus depending on the specific time to maturity.
You may be one of those Americans buying T-bills for the first time.
So let’s walk through the process of what happens when your T-bill matures and what your options are.
How do Treasury bills work?
True T-bills generally do not make interest payments (called “coupon payments” in bond parlance). Instead, you buy them at a discount.
In a hypothetical example, you might pay $950 today for a T-bill that will mature at $1,000, netting you a risk-free profit of $50.
You can also buy longer-term Treasury notes that are close to maturity and get the same effect.
For example, a 10-year Treasury note that is already nine years old and has one year remaining will have the same basic characteristics, though a portion of your return will come from semiannual coupon payments.
When your T-bill matures, its life is over. The U.S. government will pay you the full face value of the bond.
In our example above, you’d simply see the bond disappear out of your brokerage account or IRA and be replaced with $1,000.
What do you do after a Treasury bill matures?
T-bills might be risk-free in terms of credit risk and virtually risk-free in terms of interest rate risk, but they do present the “high-quality” problem of reinvestment risk.
Reinvestment risk is the possibility that your investment options might not be as attractive when your bill matures and you have the fresh cash to deploy.
Today, T-bills pay a little under 4.5%. In six months, it’s entirely possible yields will be significantly lower than that.
Reinvestment risk should be a factor you take into consideration when choosing what specific security to buy.
Today, four-week T-bills offer a yield of 4.31%. But a T-bill with a year to maturity yields about 3.98%.
Do you chase that higher yield on the shorter-term bill knowing that you might have to reinvest the proceeds when it matures at a lower rate?
Or do you lock in a slightly lower yield to eliminate that risk?
"The best solution for minimizing reinvestment risk is simply to split the difference and ladder your fixed income portfolio," said Douglas Robinson, a bond trader and principal of RCM Robinson Capital Management LLC in Mill Valley, California.
"As a practical matter,' Robinson notes, "this would mean dividing your investment in T-bills into several smaller investments, each maturing on a different date."
If you’re investing a modest amount, laddering might not be super practical.
But if you have a large chunk of your net worth invested in T-bills, laddering can be a good way to guarantee a decent yield while also giving you the ability to quickly reinvest as opportunities present themselves.
Related content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Charles Lewis Sizemore, CFA is the Chief Investment Officer of Sizemore Capital Management LLC, a registered investment advisor based in Dallas, Texas, where he specializes in dividend-focused portfolios and in building alternative allocations with minimal correlation to the stock market.
-
I want to retire, but I have to keep working so my adult kids have insurance. Help!
It's a tricky period when your adult child is under 26 but needs health insurance. We ask financial experts for advice.
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out On
Most large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out On
Most large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
Don't Let Your Equity Compensation Trip You Up: A Financial Expert's Guide
Stock options, RSUs and other executive perks can come with some serious strings attached. To avoid a nasty tax surprise, you need a plan.
-
Rally Fades on Mixed AI Revolution News: Stock Market Today
All three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
The Spendthrift Trap: Here's One Way to Protect Your Legacy From an Irresponsible Heir
A spendthrift clause in an estate plan can protect an inheritance from a financially irresponsible child's debts and poor decisions.
-
Adapting to AI's Evolving Landscape: A Survival Guide for Businesses
Like it or not, AI is here to stay, and opting out could be disastrous for your organization. Instead, focus on what you can control and be flexible, as AI is still evolving.
-
S&P, Nasdaq Hit New Highs: Stock Market Today
A late-day rally wasn't enough to lift the Dow into the green as its six-session winning streak came to an end.
-
AMD Stock Surges on OpenAI Deal
Advanced Micro Devices could see tens of billions of dollars in new revenue from the ChatGPT maker as the AI infrastructure buildout accelerates.
-
These Stocks Dipped in 2025. Do They Have Value?
If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.