Calculates the yield on a Treasury bill
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What is the TBILLYIELD Function?
The TBILLYIELD Function[1] is categorized under Excel FINANCIAL functions. It will calculate the yield on a Treasury bill.
In financial analysis, TBILLYIELD can be useful in calculating the yield on a Treasury bill when we are given the start date, end date, and price.
Formula
=TBILLYIELD(settlement, maturity, pr)
The TBILLYIELD function uses the following arguments:
- Settlement (required argument) – This is the settlement date of the Treasury bill. The security’s settlement date is the date after the issue date when the T-bill is traded to the buyer.
- Maturity (required argument) – This is the T-bill’s maturity date. The maturity date is the date when the T-bill expires.
- Pr (required argument) – The T-bill’s price per $100 face value.
How to use the TBILLYIELD Function in Excel?
As a worksheet function, TBILLYIELD can be entered as part of a formula in a cell of a worksheet. To understand the uses of the function, let us consider an example:
Example
Assume we are given the following data:
- Settlement date: 04/01/17
- Maturity date: 06/30/17
- Price: 98
- Face value: 100
Using the TBILLYIELD function, we can calculate the yield. The formula is:
We get the results below:
Things to remember about the TBILLYIELD Function
- #NUM! error – Occurs if either:
- The settlement date is greater than or equal to the maturity date or the maturity date is more than 1 year after the settlement date
- The supplied pr argument is less than or equal to 0.
- #VALUE! error – Occurs if either:
- Any of the supplied arguments are non-numeric
- The settlement or the maturity arguments are not valid dates.
- Settlement and maturity are truncated to integers.
- TBILLYIELD is calculated as follows:
Where:
DSM = number of days from settlement to maturity, excluding any maturity date that is more than one calendar year after the settlement date
- The settlement and maturity arguments should be supplied to the function as either:
- References to cells containing dates
- Dates returned from other functions or formulas.
Click here to download the sample Excel file
Additional Resources
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FAQs
The TBILLYIELD function uses the following arguments: Settlement (required argument) – This is the settlement date of the Treasury bill. The security's settlement date is the date after the issue date when the T-bill is traded to the buyer. Maturity (required argument) – This is the T-bill's maturity date.
How much will I make on a 3 month treasury bill? ›
3 Month Treasury Bill Rate is at 5.25%, compared to 5.25% the previous market day and 5.09% last year. This is higher than the long term average of 4.19%. The 3 Month Treasury Bill Rate is the yield received for investing in a government issued treasury security that has a maturity of 3 months.
What is the T-bill yield function in Excel? ›
The TBILLYIELD function in Excel is used to calculate the yield as a percentage of the T-bills based on the settlement date, maturity date, and price of the T-bill. The yield of T-bills is calculated by purchasing them at a discount price and redeeming them at face value upon maturity.
How much does a $10,000 treasury bill cost? ›
They are sold at a discount to face value, and the difference between the discounted price and face value is your return on investment. For example, if you buy a 12-week T-bill with a face value of $10,000 for $9,800, the difference of $200 is your return for holding the security for 12 weeks.
What is the best practice for Function Arguments? ›
Summary
- Keep the number of function parameters to 3 or less.
- If you need more than 3 param values, use an object.
- If you use an object and can use ES6, use Destructuring to set default values.
- If you use an object and cannot use ES6, use Object.assign to easily set default values.
What is the IF function? Therefore, the first argument, logical_test, is the condition that you want to evaluate. The second argument, value_if_true, is the value that is returned if the condition is true. The third argument, value_if_false, is the value that is returned if the condition is false.
Are 3 month T-bills a good investment? ›
Treasury bills are a good option for investors who are looking for a safe and secure investment with a short-term maturity while parking their money for a short period.
How much will 100k be worth in 30 years? ›
Answer and Explanation: The amount of $100,000 will grow to $432,194.24 after 30 years at a 5% annual return. The amount of $100,000 will grow to $1,006,265.69 after 30 years at an 8% annual return.
What is the easiest way to buy a 3 month treasury bill? ›
You can only buy T-bills in electronic form, either from a brokerage firm or directly from the government at TreasuryDirect.gov. (You can also buy Series I savings bonds through TreasuryDirect.gov). The most common maturity dates are four weeks, eight weeks, 13 weeks, 26 weeks and 52 weeks.
What is the formula for the yield of a Treasury bill? ›
To calculate yield, subtract the bill's purchase price from its face value and then divide the result by the bill's purchase price. Finally, multiply your answer by 100 to convert it to a percentage.
The first calculation involves subtracting the T-bill's price from 100 and dividing this amount by the price. This figure tells you the T-bill's yield during the maturity period. Multiply this number by 100 to convert to a percentage.
How are Treasury bill yields taxed? ›
Taxation. Interest income from Treasury securities is subject to federal income tax but exempt from state and local taxes. Income from Treasury bills is paid at maturity and, thus, tax-reportable in the year in which it is received.
Are Treasury bills better than CDs? ›
If you're saving for a goal less than a year away: If you're saving money for a goal with a short-time horizon, T-bills can make more sense than CDs. They provide a higher APY than savings accounts, and they're more liquid than CDs.
What happens when a T-bill matures? ›
When the bill matures, you are paid its face value. You can hold a bill until it matures or sell it before it matures.
Do banks charge a fee for Treasury bills? ›
When you buy T-bills through your bank, it may charge you additional fees and expenses such as sales commissions or transaction charges. These extra costs can add up over time and eat into your returns on your investment.
When would you need to pass arguments to a function? ›
So basically you want to use arguments whenever you want the output of your method to be affected by some sort of input. Let's say for example that you are creating a method that adds two numbers together. This is perfectly valid code, but whenever you use this, it will always just add 1 and 2.
What is the Function Arguments dialog box? ›
After typing the XLOOKUP function, you can use the "Insert Function" button (fx) next to the formula bar or use the shortcut Ctrl + A to open the Function Arguments dialog. In the Function Arguments dialog, each argument is displayed in a separate box, making it easier to input the values.
What is an argument for a function and how do you use it? ›
The objects sent to a function are called its arguments. Arguments are sometimes also called parameters. Passing an object as a argument to a function passes a reference to that object. Argument names in the def line of the function become new, local names.
What are Function Arguments in C language? ›
What is Argument? The values that are declared within a function when the function is called are known as an argument. These values are considered as the root of the function that needs the arguments while execution, and it is also known as Actual arguments or Actual Parameters.
