T-bill rates are lowest since January

Associated Press / June 15, 2010

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WASHINGTON — Interest rates on short-term Treasury bills fell in yesterday’s auction to the lowest levels since late January.

The Treasury Department auctioned $27 billion in three-month bills at a discount rate of 0.065 percent, down from 0.130 percent last week. Another $27 billion in six-month bills was auctioned at a discount rate of 0.150 percent, down from 0.210 percent last week.

The three-month rate was the lowest since these bills averaged 0.055 percent on Jan. 25. The six-month rate was the lowest since they averaged 0.135 percent, also on Jan. 25.

Falling rates would typically discourage investment in Treasury bills.

But they also offer investors low risk, making them attractive for people seeking a safe place for their money during turbulent times.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.36. A six-month bill sold for $9,992.42. That would equal an annualized rate of 0.066 percent for the three-month bills and 0.152 percent for the six-month bills.

Separately, the Federal Reserve said yesterday the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, fell to 0.33 percent last week from 0.36 percent the previous week.