How to Buy Treasury Bills with Interactive Brokers (Step-by-Step Guide)

[@ZietInvests]

🔴 𝗦𝘁𝗮𝗿𝘁 𝗜𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗜𝗕𝗞𝗥 ➡️ www.interactivebrokers.com/mkt/?src=zietPY2&url=%2Fen%2Fwhyib%2Foverview.php%3Fnored%3Dt If you found this video helpful, it would do our team a great pleasure if you can check out Interactive Brokers (with the link above), as we will receive a very tiny kick back - we promise to make more and higher quality videos for all of you ❤ Have a nice day ahead!

[@Chryeon]

wrong timing to enter Tbills, recession & coming collapse of dollar going to depreciate those bills in the short terms

[@CarpMiro]

Hi, thanks for the video full of information. Does anybody there have experience with the tax Ziet mentions ? Is it true that IBKR does not withold the tax from return from T-bills ?

[@yomi001]

Very well explained! And thanks for discussing taxes too.

[@ZietInvests]

You're most welcome!!

[@MStar10]

Thanks but you didnt cover if you can or need to sell before 1 yr maturity - what happens and I assume you don't lose too much money b/c the bid / ask are pretty tight? Pls lmk thanks!

[@maumex]

Can I enter a T-Bill only for 1 month? Would that pay me the proportional or how to calculate?

[@ASITL]

how to buy money market funds on IBKR?

[@minniemouse8332]

Awesome!!! I look fwd to ur next video. You make it easy for layman to understand complicated financial instruments

[@ZietInvests]

Glad you liked it! More to come

[@ManMan-sf6ly]

@@ZietInvests ..... Please make a video about ((Tiger Brokers)) the new one . How to open an account 🤔🤔🤔🤔

[@m3blackrabbit988]

This is another piece also stating Treasury bills are no longer subject to estate tax: Debt obligations of a US person (including a corporation organised in a state in the United States), the federal government or a US state are deemed situated in the United States for estate tax purposes. However, there are broad exceptions to this rule resulting in most debt obligations held by non-US residents being deemed situated outside the United States. Most corporate debt held by non-resident aliens qualifies for the 'portfolio interest exemption', meaning that interest on the debt is not subject to US withholding tax or income tax when received by the non-resident alien. The Internal Revenue Code specifically provides that any debt obligation qualifying for the portfolio interest exemption is deemed to be situated outside the United States for estate tax purposes. Thus, if a non-resident alien owns debt issued in the United States and does not pay tax on the interest (because it is not subject to US withholding tax), the debt instrument is not subject to US estate tax on the investor's death. Certain debt is outside the scope of the portfolio interest exemption, including debt with a maturity of 183 days or less which does not pay interest. The Internal Revenue Code also provides that short-term notes are deemed foreign situs as long as they are not effectively connected with the conduct of a US trade or business. As a result of this provision, Treasury bills, which mature in one year or less, are exempt from US estate tax even if they do not qualify for the portfolio interest exemption. While tax-exempt state and local bonds that do not pay interest are also outside the scope of the portfolio interest exemption, they are not specifically excluded from US estate tax. Thus, state and local short-term obligations would be subject to US estate tax.

[@ZietInvests]

Interesting, thank you so much for sharing this one!

[@blhlow4904]

@M3BLACKRABBIT, @ZIET, Sorry I had to listen to your video and read this message twice but still am unsure if I understand it. Can I conclude that if I buy T bill of less than 183 days, it is not subject to estate taxes? many thanks

[@m3blackrabbit988]

@@blhlow4904 From my understanding, all T-bill no matter more or less than 183 days are exempted from US estate taxes. But state and local short-term bills would be subject to US estate tax.

[@maxmmv]

What about 2-year US Treasuries? Are they subject to (i) US withholding tax and/or (ii) US estate duty when held by non-US residents? Thanks!

[@mcmoore02]

The US estate tax exemption is $12.92 million (2023 and adjusted higher annually for inflation considerations). So even if US treasuries were taxable, you would be exempt unless you own > $12.92 million. And if you plan to own more than $12.92 million of any US asset, setup a trust (any domicile) and purchase US assets via the trust. Trusts don't die and are not subject to estate taxes. With this much capital, you should be able to afford a good lawyer / accountant to create a trust for you, or research how to setup yourself. This applies to US residents and non-residents. Well advised individuals should never pay US estate tax!!

[@wiwiwiwi-fv7fg]

On US T-bills, does IB provides direct subscription on new T-bill issuances Vs buy/sell function.

[@valentinotrent4375]

I don't believe you can buy T-Bills from the Primary market with IBKR. I am using another broker to get exposure to the primary market with no fees. It would be nice if IBKR could give us access to the Primary market.

[@lukasplx9330]

Thanks a lot Ziet. This video was very helful and informative.

[@ZietInvests]

My pleasure!

[@kitang9442]

I have a question, when I tried to buy, it stated “trading bond without classification is not allowed” what does it mean ?

[@FclchteelS]

@Ziet Can you explain the ask size ? The way I understand it is as a minimum order size. E.g. in the video it is 77K, does it mean I have to buy at least USD77,000 of T bills?

[@cswee3114]

There are some websites that say "there is no withholding tax on coupon paid if alien resident is holding the long term US treasury note directly". Will this be applicable to the case where we buy these treasury note via IBKR? there are still many conflicting information relating to withholding tax on coupon payment by US treasury for alien residents.

[@luchandmorris6174]

Great information.. Always looking forward for your videos.

[@ZietInvests]

Glad you like them!

[@IpMarjorie]

good vid ! whats the difference between market order and limit order? how should i set it?

[@PonderDuke]

Where can you actually see what the coupon interest rate is and where can you see if you are buying a 1 month 3 month or 6 month bond? It's confusing.

[@gastonsaillen]

simply select the dates, then see the maturity, that is the date you will get back your $1000 + interests

[@Psolemn]

great video right here. thanks man

[@ZietInvests]

thank you!

[@tellyherawati4957]

Do you know how to buy the treasury bills from TD Ameritrade Singapore? The platform is different with US one.

[@charleecasper8235]

@ZietInvests 👋 Hi, so I followed the instructions as per the video and bought T-Bills on IBKR. Today was the expiry. I wanted to wait for the US market to open to sell it and so I did. When I logged into IBKR, the T-Bills that were expiring today were no longer in my portfolio and my cash/buying power remains the same as originally bought. No interest. Should I have sold before the market opened? What did I do wrong? Help 😖

[@wjlim90]

Did you get your interest and money back? Any deduction as in tax or fees?

[@cwl.5293]

Have you studied money market fund that invest into Tbill, Tnote, Tbonds? Pay some fee, take some risk (ensure underlaying asset is treasury) or bank fd's, can enter and exit anytime?

[@ZietInvests]

From my research those funds usually come with much higher fees that eat into the return quite a bit. Will share if i found better MMFs for this purpose!

[@clementcle130]

Thank you but you directly jumped to the Request for Trading Permissions screen and I do not know how to go to that screen. I have to resort to see other videos.

[@ZietInvests]

Sorry for that Clement! Can search it on the search bar 🙇🏻‍♂️🙇🏻‍♂️ will take note for next time

[@chriswu5917]

can I buy US Tbill in Canada?

[@thom3820]

can is use my ira account to buy T bills for a month or is there an etf? Good video

[@ZietInvests]

Hi Thomas, yes you can buy T bills directly! For ETF on 1 month T bill, you can look at the iShares Short Treasury Bond ETF (SHV) - hope this helps!

[@cheapogeorge9001]

Hi Ziet, I follow your search and I noticed at the very top of the search there's a T-bill with STRIPS. What is the difference between STRIPS and the normal T-bill? Which one do you recommend picking? Thanks

[@vancouvergirlBC]

Fantastic video answering all the questions I had. Thanks!

[@ZietInvests]

So glad to know that!!😁

[@vancouvergirlBC]

@@ZietInvests Hi Ziet, just wondering if you have difficulty being filled at mid price?

[@were2man]

Can comment on Strip bond which is stripped of interest? That means no dividend tax involved?

[@ZietInvests]

Hi Joshua, sorry but i don't do Strip bond :x

[@mohamedmadkour6926]

Many thanks. Very insightful. But after i placed the order it disappeared and cant find it, any thoughts?

[@ZietInvests]

hmmm did you place at the end of the trading day? can check at your pending orders again

[@baptiste6436]

Which column corresponds to the actual yield?

[@ZietInvests]

Should be the one with "Yield" or "Coupon"!

[@Gustavo-bi4hv]

Whats happens in practice when the t-Bill reaches the maturity date?

[@ZietInvests]

You will get your principal back! (+ the last interest payment)

[@AmarSingh-uc7px]

Is there any withholding tax for Singapore investors?

[@ZietInvests]

As far as i know, there is no withholding tax on U.S. Treasury securities for Singapore investors as US treasury securities are generally exempt from U.S. withholding tax, regardless of the your nationality or residency.

[@AmarSingh-uc7px]

@@ZietInvests I bought treasuries using ur method. How do I track the interest received and the expiry date?

[@jjl4m]

Quick question. In the example you showed the ask price is 97.63390 and the bid price is 97.61910. Why would you put the order through at the higher ask price and not go with the lower bid price? Sorry it’s my first time so I might be missing something here. Thanks a lot.

[@jeronimosuarez7957]

Thanks for the short and crispy content! Really good! I also use IBKR, and my question is, if they currently give you 5% interest on your cash, why bother buying the 5% bonds?

[@ZietInvests]

Thank you! When same rates apply, the one with lower risk wins. So if you can get the same 5% interest rates on your cash/ savings account (asset protected by insurance), by all means go for it!

[@Lee-xw5cf]

What about Treasury inflation-protected securities (TIPS) or I-bonds ? Can non-us investors buy these types of bonds?

[@VakoDesign]

I was interested in those. After some research it seems like you can't. It was asking for US Social Security Number and had limit of 25,000 per person as I remember.

[@reynaldofuentes2555]

Do you have insight on ETFS that follow glibal bond market?

[@ZietInvests]

hey there, you could be looking for this video: kzbin.info/www/bejne/aKjEo5yCbsxjppY

[@mohanfonseka6256]

Does the interactive broker platform deal with real US stock or CFDs?

[@ZietInvests]

Yes they do for both

[@mohanfonseka6256]

@@ZietInvests Which one is more beneficial/useful for retail investors?

[@bryanzinkai626]

What about the bond ETF like GOVT, IEI, IEF and etc? Are they similar?

[@ZietInvests]

Hey Bryan, they are all bond ETFs that focus on different segments of the US treasury bond market. Like GOVT focuses on U.S. Treasuries ranging from 1-30 year maturities, whereas IEI and IEF, focuses on bonds with maturities between 3 and 7 years and 7 and 10 years respectively.

[@m3blackrabbit988]

Hi, this is what I have found from internet regarding the estate tax for treasury bills: Debts of U.S. obligors. Once again, however, publicly traded bonds issued after July 18, 1984 qualify as "portfolio debt" and therefore are not subject to U.S. estate taxation. (I.R.C. § 2105 (b)(3)) Previously, only bonds with a maturity of more than 6 months qualified for the estate tax portfolio debt exemption, so that short-term Treasury bills, for example, were U.S. situs assets. However, this distinction was eliminated by the Taxpayer Relief Act of 1997, and bonds now qualify for the portfolio debt exemption regardless of maturity.

[@ZietInvests]

That's what I got too! Thanks for sharing again!

[@jwchong5424]

How about buying SGOV and BB3M ETF instead of buying Treasury in secondary market? Do these ETF exempted from estate tax and withholding tax too?

[@Akshay-vv2cq]

@@jwchong5424hey have u found out?

[@imsupersane4603]

Hi, I got some questions. Correct me if in wrong, for example a T Bill worth 100$ which may be sold at 90$. At the end of the 1year time period, you cash in the bill and receive 100$, thus profiting 10$ right? 1) So why would any1 buy them at premium?🤔 2) lets say you are from country that does not have tax treaty with US, so you need to pay 30% withholding tax, so if u profit 10$, 30% of 10% = 3$ will go to tax , therefore your net profit will be 7$ goes into your pocket right? Anyway, awesome video! Always excited whenever you upload a new video 😂

[@johnlim665]

.

[@ZietInvests]

Hey there! 1) Because a bond's interest rate offered might be higher than the current market interest at that point of time 2) For T-bills, there's no Witholding Tax

[@imsupersane4603]

@@ZietInvests ahh thanks for the reply!

[@nealsung6498]

Whatever to pay tax for T-Bills or not, I think I need to invest T-Bills, and have a look what happens in tax. Thank you. Co-Pilot still says that we need to pay tax.

[@pablosslo]

What is Current Bid Price/Size ? its often x $25,000K - so I cant just buy for 1k? Minimum transaction is much more?

[@ZietInvests]

Hi pablo, as far as i can remember it was USD 1,000, but you might have to check with IBKR's customer support if they have changed that

[@geoffreylee1780]

Hi Ziet, after the bill, note or bond reach its mutuarity date, is the interest and principal will automatically deposit into my account?

[@geoffreylee1780]

If I buy a bill with 1 year duration, but hold it with 6 month, am I going to get the full interest ?

[@ZietInvests]

Hi Geoffrey, you will get the pro-rated (6 month interest). And yes, will be automatically deposited to your account ya.

[@mfinkel]

How do i know if i buying 3-months or 6-month tbills?

[@ZietInvests]

Can go their screener and pick the duration!

[@schumy1975]

do we need to worry about the default/ fraud / bankruptcy risk of the broker that we buy the US Treasury bonds with?

[@ZietInvests]

It's not 100% bankruptcy proof, but good measures are all in place because ultimately a broker is a regulated business, so if you ask me it's still ok - if they fail, it means the global banking economy will already been in a big trouble

[@aiwee86]

Any minimal risk???😊

[@ZietInvests]

US government defaulting in the near term😆

[@aiwee86]

Ziet, how to knw whther ibkr aprove my bond trading permission? Do they send confirmation email? I juz follwed yr method to request frm ibkr.🙏

[@krzysztofszarlej1363]

I want to buy the T-Bills following your tutorial. However, after submitting an order for a T-Bill with maturity in June it literally stayed as "Submitted" for the entire day and didn't get filled. Situtation that nobody was selling a T-Bills sounds impossible. What could be the other reason?

[@ZietInvests]

Hmm was it during market hours? Did you use market order?

[@elcal6403]

Thank you for your video! Quick question, can we buy 1 lot in your example since it's only $976, which is below minimum of $1k?

[@ragcnvxo]

I think the minimum is regarding face value (so, yes, I believe you could buy it).

[@anthonypauwaert]

I purchased a treasury bill following your video, but in my portfolio it says "null Govt Bill". What does "null" mean?

[@ZietInvests]

Try checking again during market hours?

[@mariorg1312]

astonishing information quality and concessive! great work man

[@ZietInvests]

Much appreciated!

[@b4bmm]

Can you withdraw funds before 3 months If you invest in three month treasuries or is it locked away? If you can withdraw after a month or two will you get a proportional return for the period you have been invested?

[@gollodum88]

You can sell your treasuries at market price (as you would trade any other asset).

[@plamenvasilev]

How to buy 10y Tbills?

[@ZietInvests]

Can follow this tutorial and adjust the maturity date accordingly!

I tried to buy a tbill from EU, but I received "Warning: Your order will not trade at the NBBO because it does not meet the minimum size requirement, please make the price more aggressive or increase the size.". Have anyone encountered this?

[@ZietInvests]

Hey there, perhaps you can check with IB's live chat support about this. They should be able to help you out.

[@mrrscta]

Hi Ziet, my country falls in the 30% tax on the bond dividends. How about just leaving the cash in Interactive Brokers account and earn market rate Interest on uninvested cash balances?

[@ZietInvests]

Can also, but keep in mind you need high account balance for the interest from IBKR

[@reynaldofuentes2555]

I thought international IBK accounts don't earn interest on uninvested balance

[@skulu]

@@reynaldofuentes2555 I can confirm that the IBKR Singapore one earns interest

[@geoffcattrall1669]

There are 3 main reasons (that I can think of) why you might want to buy US-T Bonds/Bills vs. just collecting interest on your un-invested cash with IBKR. (And this assumes that you have a Net Asset Value (total account value including equities, etc) of over $100,000 USD, because if you don't you will earn a pro-rated (lower) interest rate than what IBKR advertises. 1. Yields for Bonds/Bills are generally about 0.5% higher than what IBKR pays on your cash balances 2. IBKR does not pay any interest on the first $10,000 USD cash in your account, so you're lending that amount to them for 'free' 3. Once you buy a Bond/Bill the yield is effective guaranteed if you hold it to maturity. The interest paid by IBKR will go up/down with the prevailing market rate.

[@mrrscta]

@@geoffcattrall1669 My main reason would be that the dividends for foreigners are taxed at 30%. And you need to reinvest the dividend as well. I appreciate your comment.

[@pramod4lk]

Thanks so much for sharing this info...!!!

[@ZietInvests]

Hey Pramod! You are so welcome 😊 Do remember to share it!

[@saruribrea]

Normally, T-bills are fully guaranteed and backed by the U.S. government. BUT, I just saw latest news that: U.S. government has defaulted on its debt obligations before AND U.S. Treasury hit its $31 trillion borrowing limit in Jan 2023, WHICH then increase chances of U.S. government EITHER late in its debt payments OR once again default on its debt obligations, when the debt ceiling is hit later this summer. And so, there were advice to avoid T-bills with maturity between July and September. I were just going to purchase T-bills with August maturity, when I came across the above news, so I am very worry to proceed now. Was tempted to buy due to zero / low risk, but now the risk is very high?

[@ZietInvests]

That could be a concern, but it just doesn't make sense for US to default on its debt - it's a very big implication if congress doesn't raise the debt ceiling (historically, they always raise), so in my opinion it's still not a huge concern

[@uncletee100]

can you buy T-bills in moomoo?

[@ZietInvests]

not at the moment with moomoo MY (its possible with moomoo SG tho!)

[@kenchoi702]

Very informative. Thank you!

[@ZietInvests]

Glad it was helpful!

[@joo7951]

Is it only me that i cannot find the bond scanner? 😢

[@GlennJag]

Thanks for making this video

[@ZietInvests]

Thanks for watching it till the end!

[@bernhardsmuts2265]

Great video thanks!

[@ZietInvests]

Glad you liked it!

[@SK1112S]

New sub here. Why does Ibkr show matured bonds as still trading? Sometimes I see bonds matured in 2022. Thanks for the input.

[@SK1112S]

I even can filter for bonds maturing at Feb 2020 😢

[@ZietInvests]

Hmmm weird, can probably check with IBKR? Not sure about that tho

[@MIPousette]

Good Video. It would be good if you could share where and how in IBKR reporting you can see income earned for bonds, notes and t-bills. I still havent fully understood...

[@ZietInvests]

Hi! I think you will only see the return of investment when the US treasury buys it back at maturity date, so until then there will be nothing to see! You can check out this video on how to check out your account statement: kzbin.info/www/bejne/jX6un4h3lr-gbtk

[@markom001]

Wow awesome, very useful video. Thanks so much Ziet!

[@ZietInvests]

Cheers Marko, glad you like em!

[@sonaldosui8154]

Brother, I want to help you with my heart. You need to take accutane, which is a common acne medicine that actually fix the problem. Cuz acne will fix on them own, but take for ever and lot of scars. Accutane is vitanmin A that repairs your skin and fix your hormones that treats acne

[@ZietInvests]

Hi, thank you so much for your concern and suggestions! I've since gotten help from dermatologist and have recovered quite well (can see my latest videos or instagram for my progress). Thank you once again ❤️

[@pirate1367]

I thought you push on SNP 500?

[@ZietInvests]

This is an alternative for those that prefers capital preservation for their excess cash😁

[@marcotiraferri9746]

once you buy a T bill , you just wait that reach the maturity day and it will close automatically?

[@ZietInvests]

Yup!

[@Johann75]

Ziet, in all your videos, when you mention about countries with the tax treaty, you only mention the fraction that is taken by US and you skip the percentages taken by the treaty countries. They will also take their part of taxes.

[@ZietInvests]

Hi Johann, thank you for reminding me about that! As far as i know most country has double tax agreement (DTA) hence its only taken up once, and assuming the country doesnt tax foreign investment income, i think thats the only once (US) - correct me if im wrong!

[@Johann75]

@@ZietInvests if the source and destination countries both are charging dividend tax, they will share it, let’s say 15%+15%. If the source does not charge the capital gain tax, but destination does, destination will charge it in full. If the source is charging gift tax in full, destination cannot charge it to avoid double taxation. In most cases it will not be exactly like this, but this is how it works if you try to simplify and explain the tax treaty in general.

[@sash-papparazzi]

@Ziet Invests , great Video. Did you test by now if there is infact no 30% withholding tax being applied once your t-bill matures and get cashed into your IB account ?

[@ZietInvests]

Hi Sash! Havent got to try it out myself yet unfortunately 🥲

[@SejuaniMedio]

Muy bien explicado.

[@ZietInvests]

Glad you like it!

[@kpcb]

is it just me, or buy order for tbills takes forever to fill, even when submitting order at Ask or even market order?

[@ZietInvests]

👀 good feedback, curious to know this too

[@jollyrogers9919]

"bonds, notes"...and what about the other interest-bearing obligations of U.S. residents or domestic corporations". Isn't a T-bill such a thing ?

[@ZietInvests]

You're right! A T-bill (Treasury Bill) is an interest-bearing obligation issued by the U.S. government, but it's a short-term one. Bonds and notes refer to longer-term securities, with notes being mid-term. Both T-bills and bonds are solid options depending on your investment horizon.

[@jamesteh829]

Great sir😊

[@ZietInvests]

Thank you James! Plan to invest in them? 😁

[@jamesteh829]

@@ZietInvests will do. Keep up with your session

[@MancoDeLepanto]

Like for Konata 💪

[@ZietInvests]

Haha ✌🏻✌🏻

[@3artxart3]

I really love your videos, but still this one leave with a lot of doubts about bonds. Why 4.5% is guaranteed? What happen when you buy at discount, and what if premium? Bid and Ask yield what they are "practically"? it is the same of the yield rate of the bonds? What happen at the maturity date? etc etc. There is no content on line about bonds due to the market condition of the past years. But it's a HUGE topic right now and i think longer and detailed videos could be more helpful :)

[@ZietInvests]

Hi! Guaranteed because they are backed by the US government. For more info about bonds, you can check out my video here: kzbin.info/www/bejne/aKjEo5yCbsxjppY&ab_channel=ZietInvests

[@holeefuk8505]

So basically, if you want avoid both interest & estate tax, 1 year t bill only real option. Even 6 month is 182 days which falls under estate tax.

[@ZietInvests]

Yup you can say so

[@gconceptg7486]

1st😮😊

[@ZietInvests]

🥇

[@reichjef]

The reason why is if you’re knocking on deaths door, they don’t want you buying short term bonds to avoid the estate tax.

[@ZietInvests]

Ahh…that makes so much sense

[@tistoni09]

You cannot trade less than 1 million USD treasuriy bonds this way, according to IBKR support. Did you manage to buy it?

[@ZietInvests]

You can definitely do that, else it doesn’t make sense to put it there

[@gennaropalio8878]

super

[@ZietInvests]

😘😘🥳🥳

[@samuelzev4076]

Wouldn’t buying bonds be the same as giving the US government our money which increases the US’s debt and considering how the country owes money to other countries like China means that it will inevitably hurt the US’s economy later on?

[@ZietInvests]

Uhmm bond/bond financing is part of the economy, our small money wouldn't make a dent on it

[@bitcoinnotcrypto]

You're buying them in the secondary market not directly from the government. The government immediately offers the bonds to banks and they resell them to you and I. Therefore our activity is not adding more debt as it's already been added

[@aftabsarwar2213]

Today signature bank up 130/% in single day.

[@ZietInvests]

I dont think its tradeable anymore?👀

[@alwarithalkhusaibi7902]

Try to buy Sukuk instead of bonds

[@ZietInvests]

For shariah compliant purpose, i suppose you can do so!

[@alwarithalkhusaibi7902]

@@ZietInvests Thx 👍💕

[@danmosby7980]

You need to switch to carnivore diet. this will fix up the imume system and hormones.

[@rnegoro1]

Now is 4.5 %

[@ZietInvests]

Yeah about there! It drops pretty quickly after the banking crisis developed (when this video was prepared) :x

[@whyh]

No risk? We'll find out in 10 days

[@ZietInvests]

🙇🏻‍♂️