Money Market Account: Competitive vs Noncompetitive Bids on Treasury Bills

When the stock market performs badly, more and more people look to invest their money in the safest ways possible. One way that many people feel more secure is by investing in the Treasury bill. Treasury bills, or T-bills as they are often called for short, are issued by and protected by the federal government, and are the most marketable money market security. With that kind of guarantee behind them, they are an attractive option for investors who are always cautious by nature and for those who are seeking shelter rough financial times. When you invest in Treasury bills, the process involves either competitive or noncompetitive bidding. Read on for further clarification of the Treasury bill bidding process.

When you, like millions of other Americans and international investors, decide to invest in American Treasury bills, you first decide how much money you want to spend. Then, you make a bid on the Treasury bill. If you make a noncompetitive bid, you will get the entire amount of the Treasury bill you want at the return rate which is set right there at the auction. If you decide to make a competitive bid, you get to request the return you would like to get on your Treasury bill. With competitive bids, you might get the return you want, or not. You could also receive a portion of your request.

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Before you venture into the world of Treasury bills and Treasury bill auctions, it’s critical that you discuss your plans with a financial advisor. By consulting with a financial advisor, you’ll be getting much-needed advice on what to do, what not to do, and where to go when it comes to investing not just in Treasury bills but all kinds of financial products and investment vehicles. Treasury bills are a safe investment but they’re even more so when you know what you’re doing.

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Money Market Account: Competitive vs Noncompetitive Bids on Treasury Bills
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