3 Month Treasury Bill Calculator
Short-term government securities are among the safest investment options available, especially for investors seeking predictable returns with minimal risk. One of the most popular instruments in this category is the 3 Month Treasury Bill (T-Bill). While T-Bills are simple in concept, calculating their actual return, yield, and reinvestment potential can be confusing for many investors.
The 3 Month Treasury Bill Calculator simplifies this process by instantly calculating purchase price, discount amount, interest earned, yield rates, maturity date, and even one-year reinvestment projections. Whether you’re a beginner investor or an experienced trader, this tool provides clear and accurate insights into short-term Treasury investments.
What Is a 3 Month Treasury Bill?
A 3 Month Treasury Bill is a short-term debt security issued by the U.S. government, typically maturing in about 91 days. Unlike bonds that pay periodic interest, Treasury Bills are sold at a discount to face value and mature at full value.
Your profit is the difference between:
- What you pay at purchase
- The full face value received at maturity
What the 3 Month Treasury Bill Calculator Does
This calculator helps you determine:
- Face value of the T-Bill
- Purchase price after discount
- Discount amount
- Interest earned
- Investment rate
- Bond Equivalent Yield (BEY)
- Annual Percentage Yield (APY)
- Maturity date (optional)
- One-year total return with reinvestment
All results are calculated instantly based on your inputs.
How to Use the 3 Month Treasury Bill Calculator
Using the calculator is straightforward and requires only a few inputs.
Step 1: Enter Purchase Amount (Face Value)
This is the amount you will receive at maturity.
Common values are in increments of $100, such as:
- $1,000
- $5,000
- $10,000
Step 2: Enter the Discount Rate (%)
The discount rate represents how much the T-Bill is discounted annually.
This rate is usually provided at auction or by financial institutions.
Example:
- 5.25%
Step 3: Select Calculation Method
You can choose from three calculation perspectives:
- Discount Rate (Bank Discount) – Traditional T-Bill pricing method
- Investment Rate (Actual Return) – Reflects real return on money invested
- Bond Equivalent Yield (BEY) – Allows comparison with bonds
Each option helps investors evaluate returns differently.
Step 4: Enter Days to Maturity
For a 3-month Treasury Bill, this is typically:
- 91 days
However, the calculator allows flexibility between 1 and 365 days.
Step 5: Optional Purchase Date
If you enter a purchase date, the calculator will:
- Automatically calculate the maturity date
- Display it clearly in the results
This is useful for cash-flow planning.
Step 6: Choose Reinvestment Option
You can select:
- No – One-time investment calculation
- Yes – Project returns if reinvested repeatedly for one year
This feature is extremely useful for yield optimization.
Understanding the Calculator Results
Once calculated, the tool displays several important values.
Face Value
The amount you will receive at maturity, unchanged.
Purchase Price
The amount you actually pay today after applying the discount.
Discount Amount
The difference between face value and purchase price.
This represents your total earnings for the holding period.
Interest Earned
Equal to the discount amount, shown separately for clarity.
Investment Rate
This shows your annualized return based on the actual amount invested, not the face value.
It gives a more realistic picture of profitability.
Bond Equivalent Yield (BEY)
BEY converts the T-Bill return into a yield comparable to traditional bonds that use a 365-day year.
This is helpful when:
- Comparing T-Bills with bonds
- Comparing yields across different investments
Annual Percentage Yield (APY)
APY reflects the true annual return, assuming compounding over time.
It answers the question:
“What would my yearly return be if this investment continued?”
Maturity Date
If a purchase date is provided, the calculator shows:
- Exact maturity date
- Easy-to-read format for planning
1-Year Total (Reinvested)
If reinvestment is selected, the calculator estimates:
- How many T-Bill cycles fit into one year
- Total value after repeated reinvestments
This helps investors evaluate the power of compounding short-term securities.
Example Calculation
Inputs:
- Face Value: $10,000
- Discount Rate: 5.25%
- Days to Maturity: 91
- Reinvestment: Yes
Results May Include:
- Purchase price slightly below $10,000
- Interest earned over 3 months
- Investment rate and BEY above the discount rate
- APY reflecting compounded growth
- Total value after one year of reinvestment
This allows you to compare short-term Treasury Bills with savings accounts or other low-risk instruments.
Who Should Use This Calculator?
- Individual investors
- Treasury Bill buyers
- Short-term income seekers
- Financial planners
- Students learning fixed-income concepts
- Anyone comparing safe investment returns
Benefits of Using a 3 Month Treasury Bill Calculator
- Saves time
- Eliminates manual errors
- Improves investment comparison
- Helps with reinvestment planning
- Clarifies complex yield metrics
15 Frequently Asked Questions (FAQs)
1. What is a 3 Month Treasury Bill?
A short-term government security that matures in about 91 days.
2. Does this calculator include compounding?
Yes, through the APY and reinvestment options.
3. Is the discount rate the same as yield?
No, yield reflects actual return, while discount rate is based on face value.
4. What is BEY used for?
To compare Treasury Bills with bonds using a 365-day year.
5. Can I calculate maturity date?
Yes, by entering a purchase date.
6. Is reinvestment calculation realistic?
It provides a reasonable one-year projection.
7. Can I use different maturity days?
Yes, anywhere from 1 to 365 days.
8. Does the calculator show APY?
Yes, it calculates and displays APY.
9. Are Treasury Bills risky?
They are considered among the safest investments.
10. Can beginners use this tool?
Yes, it’s designed to be simple and clear.
11. Does it calculate purchase price?
Yes, automatically based on discount rate.
12. Is interest paid monthly?
No, earnings are realized at maturity.
13. Can I compare multiple investments?
Yes, by changing inputs and recalculating.
14. Is this useful for cash planning?
Absolutely, especially with maturity date display.
15. Is this calculator free?
Yes, it’s designed for free and easy use.
Final Thoughts
The 3 Month Treasury Bill Calculator is an essential tool for anyone investing in short-term government securities. By clearly showing purchase price, yield metrics, maturity date, and reinvestment growth, it removes confusion and empowers smarter financial decisions.
Whether you’re parking cash safely or optimizing short-term returns, this calculator provides the clarity every investor needs.