Details Cookies
Important margin product information
CFDs and forex spot transactions are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor lose money when trading CFDs and/or forex spot with this provider. 0.56% of retail clients trading in leveraged products experience a negative account balance after a stop out occurred. You should consider whether you understand how CFDs, forex spot transactions or any of our other products work and whether you can afford to take high risk of losing your money.
Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Why are US T-bills on everybody's lips? Why are US T-bills on everybody's lips? Why are US T-bills on everybody's lips?

Why are US T-bills on everybody's lips?

Althea Spinozzi

Senior Fixed Income Strategist

Summary:  US T-bills offer an average yield of 5%, the highest in over fifteen years. In other words, amid a highly uncertain market context, you get paid to stay on the sidelines and wait for more favorable market conditions. As the Federal Reserve hiking cycle peaks, T-bills are preferable to US-Treasury floaters. Investing in short-term government bonds in the Saxo Platform is straightforward and compelling as they are one of the safest investments available to USD investors. Yet, you should know that they carry significant interest rate risk and are exposed to the debt ceiling problem.

Whether or not you have been an active investor, paying attention to the bond market has become necessary. The US yield curve is inverted; therefore, short-term US government bonds offer a higher yield than long-term bonds, providing an opportunity not seen in markets for more than fifteen years.

Simply put, investors are getting paid to park money while an overvalued market builds up for another crisis. Besides, T-bills offer an alternative to deposit interest rates, as they continue to be below the yield provided by money markets.

Investing in short-term US government bonds is compelling even for active traders. When looking at the Saxo universe, bonds can be used as collateral for margin trading. That means that professional clients can put cash at work in US government bonds, receive interest payments, and use collateral to trade other products.

T Bills: what are they, and how do they work?

  • T-bills are short-term government bonds issued by the United States with four, eight, 13, 26, and 52 weeks of maturity.
  • T-bills do not pay regular interest payments, as do coupon bonds. T-bills are issued at a discount, and investors are paid par value when the bill matures.

What are the risks involved?

T-bills are one of the safest investments available to USD investors. Yet, you should know that they carry interest rate risk and move substantially around the debt ceiling issue.

T-bills' interest rate risk derives mainly from the Federal Reserve monetary policies. If the central bank hikes interest rate, existing T-bills will drop in value since their rates are less enticing than those available in markets. Given that the Fed interest rate hiking cycle is peaking, T-bills become a preferable investment compared to US-Treasury floaters, which coupon rises as the rates increase.

At the same time, the recurring debt ceiling turmoil increases volatility in certain T-bills because the market fears the federal government will run out of money to pay its bills if it’s not allowed to issue new debt. The market is currently pricing the debt ceiling to become a problem in summer, pushing yields of those T-bills maturing between June and September higher. That’s the reason behind a yield above 5% for summer maturities, while longer T-Bills maturities offer less than 5% in yield. Nonetheless, the market understands that a default by the US Treasury is very unlikely as it could prove devastating economically for the entire world. Therefore, politicians are reluctant to end up in such a situation, and the premium investors are getting for T-bills maturing in summer does not reflect the worst-case scenario.

Interestingly, the yield offered by one-month and three-month T-bills is the highest offered since 2000, breaking even above the peak of February 2007 (Image 1).

Source: Bloomberg and Saxo Bank.

How to find tradable T-bills in the Saxo Platform?

You can use the instrument screener to search for T-Bills on the Saxo platform (see picture below).

Product: Bonds
Issuer type: Government
Country: USA
Keyword: Tbill

You will find 19 T-bill securities, which you will be able to trade straight away by clicking on them.

Source: Saxo Bank.


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank (Schweiz) AG
Beethovenstrasse 33

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.