T Bill Question

[skives]

On May 14 2024 I reinvested my $15k into a 4 week t bill. The discount was $61.48 which I assume is the interest I would gain for buying it right? the Par amount was $15k. I have them take 50% out for taxes. They put $30.74 into my account when the T bill was purchased but when it was redeemed I only got $14,969.26. Shouldn't I of gotten $15k back into my account or am I wrong?

[srblanco7]

On May 14 2024 I reinvested my $15k into a 4 week t bill. The discount was $61.48 which I assume is the interest I would gain for buying it right? the Par amount was $15k. I have them take 50% out for taxes. They put $30.74 into my account when the T bill was purchased but when it was redeemed I only got $14,969.26. Shouldn't I of gotten $15k back into my account or am I wrong?

If you had $15k in your account at the time that you purchased the t-bill, it does not make sense that there was only $30.74 remaining in your account at the time of purchase. That is, the remaining amount should have reflected the $61.48 discount.

The lower amount at redemption, I presume, reflects the 50% withheld for taxes.

Are there fees in your account associated with making these types of purchases?

[disneysteve]

You got $30.74 in accrued interest at the time of purchase
You got $14,969.26 at redemption.

That adds up to $15,000.

[skives]

You got $30.74 in accrued interest at the time of purchase
You got $14,969.26 at redemption.

That adds up to $15,000.

Yes I understand that but the discount was $61.48 which is the interest correct? They take half for taxes. I know am probably just not understanding something but why was the redemption $15k? My only idea is it’s from earlier in the year when I was just buying t bills one at a time and not doing the reinvestments and I took some interest from upfront. That was the difference between the 14 969.26 and $15k

[disneysteve]

T bills are purchased at a discount and redeemed at face value, the difference being the interest earned.
You bought a $15,000 bill but only paid $14,938.52 because you got a $61.48 discount.
At redemption, you got $14,969.26 + $30.74 = $15,000.
You only got back half of the discounted amount because you had them withhold the other half for taxes.