When Treasuries Mature....

[MichealKnight]

Sorry for this basic question but it's my first time ever with a Treasury maturing.


CUSIP #: 912796Y60
Security Type: 4-Week Bill
Par Amount: $8,000.00
Price per $100: 99.651556

Issue Date: 01-24-2023
Maturity Date: 02-21-2023
Number of Reinvestments: 0

Today I see an "early deposit" in my designated bank for $8,000. But - no interest. I don't remember of hand but I want to say it was 4.558%.

It's not 2/21 - maybe that's it but then again I see the $8,000 deposited back into my account. I checked the account for the last 5 weeks - no interest payments.

Any thoughts? Thanks

 

[audreyh1]

The interest is what you originally paid for it subtracted from the par value $8000. That’s how zero coupon T-bills work.

So go find what you originally paid for it and subtract that.

I see they give you your price per $100, so multiply that by 80, and subtract from $8000. Just check that it matches what you originally paid.

This will ultimately show up on your 2023 1099 as interest income.

 

[phil1ben]

Take a look at the detail of the transaction when you purchased the bond. I suspect it is a zero coupon that you paid $7,972.12 or thereabouts and you were paid the face amount ($8,000.00) on maturity. So your interest was the difference between what you paid ($7,972.12 and $8,000.00) or $27.28 which is your interest. You buy zero coupon bonds at a discount and are paid face amount on maturity.

 

[Chuckanut]

Take a look at the detail of the transaction when you purchased the bond. I suspect it is a zero coupon that you paid $7,972.12 or thereabouts and you were paid the face amount ($8,000.00) on maturity. So your interest was the difference between what you paid ($7,972.12 and $8,000.00) or $27.28 which is your interest. You buy zero coupon bonds at a discount and are paid face amount on maturity.

+1 The discount from face value at time of purchase is the interest.

 

[flyingaway]

Where did you buy the bonds?

 

[audreyh1]

I suspect from Treasury Direct since the deposit was in his designated bank account.

 

[MichealKnight]

Where did you buy the bonds?

Treasury Direct.....

 

[MichealKnight]

Thanks for the replies everyone. Well, I'd rather look sheepish here than at a nice group dinner lol. 7972.12 was the price.

 

[pb4uski]

Take a look at the detail of the transaction when you purchased the bond. I suspect it is a zero coupon that you paid $7,972.12 or thereabouts and you were paid the face amount ($8,000.00) on maturity. So your interest was the difference between what you paid ($7,972.12 and $8,000.00) or $27.28 which is your interest. You buy zero coupon bonds at a discount and are paid face amount on maturity.

And additionally, since you paid $7,972.12 for that 4-week tbill your annualized yield would be [($8,000/$7,972.12)^(52/4)]-1 or 4.64%

 

[COcheesehead]

If the coupon says 0. You just bought a discounted bond known as a zero coupon.