A Comprehensive Guide: Purchasing Treasury Bills on Vanguard

by | Jul 31, 2023 | Vanguard IRA | 9 comments




In this video, I’ll show you how to invest in T Bills through Vanguard. I covered the basics of T Bills investing and explain how this investment strategy works in my previous video on how to make money using T bills –

If you’re looking to invest in T Bills through Vanguard, then this video is for you! I’ll show you step-by-step how to invest in T Bills through Vanguard and help you to reach your financial goals in this rising rate environment.

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Disclaimer

This video and the ideas presented in it are for education and entertainment purposes only, and should not be construed as financial, accounting or legal advice. Although I am an investment analyst, I am not your financial advisor. The content is being presented without consideration to investor-specific financial objectives, constraints, risk tolerance or financial circumstances, and may not be suitable for all investors. Past performance does not necessarily indicate future results. All investing involves risk and the possible loss of capital.

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T-bills, or Treasury bills, are a popular investment option for individuals seeking a low-risk opportunity to grow their funds. Known as one of the safest investments available, T-bills are offered by the U.S. government and are backed by its full faith and credit. These short-term debt instruments are typically issued with maturities ranging from a few days to a year.

If you’re interested in purchasing T-bills through Vanguard, one of the largest investment management companies, you’re in luck. Vanguard offers a user-friendly platform that allows investors to easily navigate the process of buying Treasury bills. In this step-by-step guide, we will walk you through the process of purchasing T-bills on Vanguard.

Step 1: Open an Account with Vanguard
Before you can start buying T-bills through Vanguard, you need to have an account with them. If you already have an account, you can skip this step. Otherwise, visit Vanguard’s official website and click on the “Open an Account” button. Vanguard offers both individual and joint accounts, as well as various retirement account options such as Traditional and Roth IRAs.

Step 2: Choose a T-Bill Auction Date
Once you have an account with Vanguard, you can proceed to buy Treasury bills. Visit Vanguard’s Treasury Direct website, which is linked with Vanguard’s platform, to view the upcoming T-bill auction dates. Treasury bills are typically auctioned every four weeks, with auctions taking place on Monday. Choose an auction date that aligns with your investment goals.

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Step 3: Determine your Investment Amount
Next, decide how much you want to invest in T-bills. The minimum investment for T-bills is typically $1,000, although certain maturities may require a higher minimum investment. Keep in mind that T-bills are sold at a discount, meaning you will pay less than the face value. The difference between the face value and the purchase price represents the interest you earn.

Step 4: Place your Order
Once you have selected the auction date and determined your investment amount, navigate to Vanguard’s trading platform. From there, select “Fixed Income” and then choose “Treasury Bills.” Specify the T-bill maturity you desire, enter the investment amount, and review the details before placing your order.

Step 5: Pay for your T-Bills
After placing your order, Vanguard will prompt you to fund your investment. You can use your existing Vanguard account to pay for the T-bills or transfer funds from an external bank account. Follow the instructions provided to complete the payment process.

Step 6: Monitor your T-Bills
Congratulations, you have successfully purchased T-bills on Vanguard! It’s essential to keep track of your investments, and Vanguard offers several tools to help you monitor your T-bills. Log in to your Vanguard account regularly to stay updated on the maturity dates and any developments related to your T-bill investments.

In conclusion, buying Treasury bills through Vanguard is a simple and straightforward process. By following this step-by-step guide, you’ll be able to invest in T-bills efficiently and take advantage of their low-risk nature. Remember, T-bills can be a valuable addition to a diversified investment portfolio, offering stability and a competitive return compared to other short-term investments.

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9 Comments

  1. Denis St

    can they be automatically reinvested as they mature?

  2. Chris

    Is 360 the number of days in a year? If yes, why not 365 instead?

  3. Dave Smith

    So good and thank you; so clear, even I can almost understand

  4. Renee Peters

    Thank you for this video. I purchased my first T-bill through Vanguard, and it will now mature in two weeks. Do you have a video to explain how to "renew" a T-bill?

  5. Christina Tinglof

    Great video. I shared it with my 20-something son. Question: I have some money in my Vanguard Roth Brokerage tucked away in a money market fund. I can't seem to buy T Bills through that account though. Is it b/c the money needs to come from my "settlement fund" instead? It wouldn't make sense to sell shares from the money market fund (capital gains) in order to buy T Bills, right?

  6. Maria M

    Don't forget to be happy. I love that. It makes me smile. Thank-you.

  7. Monica

    Thank you so much! I appreciated the clear step-by-step information. I just subscribed to your channel

  8. Kishor Mistry

    Avanti Thank you for walking through how to buy T-bills on Vanguard . Very… very help for me and others and keep up the good work!!

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