1-Year Treasury Bonds — Safe Short-Term Investing Explained

What Are 1-Year Treasury Bills?

1-year (52-week) Treasury bills are short-term US government securities that mature in 12 months. They're the longest T-Bills available and one of the most popular safe investments — your money is back in a year with a guaranteed return.

Like all T-Bills, they're sold at a discount to face value — you pay less than $100 per unit and receive the full $100 at maturity. The difference is your interest.

1-year T-Bills are a strong alternative to bank CDs — they typically offer competitive or better yields, with the added benefit of state tax exemption and US government backing.

How Does the Yield Work?

1-year T-Bill yields change at every auction and track Fed policy expectations:

In early 2026, 1-year T-Bills are yielding approximately 4.5–5.0%. Since they don't pay periodic interest, all your return comes as a lump sum at maturity — you pay ~$9,525 and receive $10,000 back in 12 months.

The yield reflects market expectations for Fed policy over the next year. If markets expect rate cuts, 1-year yields may fall below shorter T-Bill yields (an "inverted" curve).

Key Features

Who Should Buy 1-Year T-Bills?

1-year T-Bills work well for people who:

1. Want a safe place for money for ~12 months — a year is manageable and yields are competitive with or better than bank products
2. Value liquidity — while the maturity is 12 months, you can sell on the secondary market anytime
3. Want to lock in current rates — if you expect the Fed to cut rates, a 1-year T-Bill locks in today's yield
4. Don't want to freeze money for years — unlike TIPS or 10-year bonds, you get everything back in 12 months

1-Year T-Bills vs Bank CDs

The main advantage: T-Bill interest is exempt from state and local income tax. In high-tax states like California or New York, this can add 0.3–0.5% to your effective return. CDs may offer promotional rates, but T-Bills offer more consistency and government backing beyond FDIC limits.

1-Year T-Bills vs 2-Year Treasury Notes

2-year Treasury notes pay semiannual coupons and may offer slightly higher yields. But they tie up your money for twice as long. If you're unsure about your needs beyond 12 months, the 1-year T-Bill is the safer choice.

How to Buy 1-Year T-Bills

Same process as all Treasury securities:

1. TreasuryDirect.gov — set up an account and buy at auction, with automatic reinvestment available
2. Brokerage accounts — Fidelity, Schwab, Vanguard, etc. offer auction access and secondary market trading
3. Short-term bond ETFs — BIL, SGOV, SHV for diversified T-Bill exposure without managing individual maturities

52-week T-Bills are auctioned every 4 weeks. You can set up automatic reinvestment on TreasuryDirect so maturing bills roll into new ones seamlessly.

Tracking T-Bills in Freenance

Freenance lets you add T-Bills to your portfolio and track them alongside all your other investments:

• Monitor current value — see accrued discount and approaching maturity
• Track maturities — know exactly when your money comes back
• One portfolio — T-Bills, stocks, ETFs, crypto, and other assets in a single view
• Allocation analysis — see how much of your portfolio is in safe, short-term instruments

No need to log into multiple services — see everything in one place.