Get over 5%* annualised yield with UK Treasury bills

Now on Freetrade

Capital at risk. This is not investment advice.

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Important information: *Rate subject to success in tender. The rate changes at every weekly tender. Forecast is not a reliable indicator of future performance. Fixed term investment of 1 month.

Freetrade does not give investment advice and you are responsible for making your own investment decisions. If you are unsure about what is right for you, you should seek independent advice. Forecasts are not a reliable indicator of future performance. Capital at risk.

Now on Freetrade

Introducing UK Treasury bills

Earn 5%+ per year yield to maturity* (YTM) on Treasury bills.
Issued and backed by the UK government.

UK Treasury bills are debt instruments issued by the UK’s Debt Management Office (DMO) to finance its operations. The UK government promises to repay the amount you invest, plus a fixed return after a known period, for example, 1 month**. The yield is set during the weekly auction process and it is then fixed for the 1 month**  period.

Until now, individual investors did not have direct access to UK Treasury bills.

Learn more

High rates: UK Treasury bills with a competitive yield.

Low risk: Earn yield with a low risk.

Fixed term: You cannot sell or cash out of a UK treasury bill before its 1 month** maturity.

Low-risk foundation for your investment portfolio

UK Treasury bills have different features to stocks and shares. They are lower risk than stocks and shares, but your investment is locked in until maturity. 

UK Treasury bills, alongside other savings and investment products, can help build a balanced portfolio.

See how much you can earn

At Freetrade we will offer you UK Treasury bills with a 1 month** maturity.

Let’s say you want to invest £1,000 in UK Treasury bills with a 28 day maturity and with a
5% annualised yield to maturity.

Your first 28-day period looks like:

Initial investment: £1,000
Annualised yield: 5%
Period yield: £1,000 × 5% × 28 / 365 = £3.84
Total amount after one 28-day period: £1,000 + £3.84 = £1,003.84

Starting in April 2024, we will charge you a custody fee in relation to UK Treasury bills. We will share details of the fee in advance. We won't apply this fee before April 2024, so until then UK Treasury bills will be fee-free.

We will take the fee from your yield.

Fees & charges

Starting in April 2024, we will charge you a custody fee in relation to UK Treasury bills. We won't apply this fee before April 2024, so until then UK Treasury bills will be fee-free.

We will take the fee from your yield.

Automatic reinvestments

Freetrade will automatically reinvest your UK Treasury bills at maturity to keep your earnings going. You can choose to turn this feature off, or you can reinvest a partial amount at any point after purchase. We will remind you before your UK Treasury bills mature, so the control is in your hands.

Looking after your assets

Freetrade keeps its clients' cash and investments safe by:

Separate Accounts: Your money and assets are held in separate accounts, away from Freetrade's money and assets. This means that your money and assets are protected, even if Freetrade were to become insolvent or stop doing business.

FSCS Protection: Freetrade is a member of the Financial Services Compensation Scheme (FSCS), which means that you are protected up to £85,000 for unpaid claims against Freetrade in the unlikely event of Freetrade's insolvency.

For more in-depth information on how we safeguard your money and investments read here.

Want to learn more about UK Treasury bills?

Visit our insightful educational resource page.

Educational page

Important information: The DMO issues UK Treasury bills every week at different yields to maturity, that are determined by market conditions and demand, and the Bank of England base rate.

Before the issuance of the Treasury bills, the yield is uncertain. The app will show you the yield that was achieved in the previous week. Therefore, the yield you receive on your Treasury bills may be different from what your app displays at the time you place your order. 

This means that you will not know exactly what yield you will receive until after you have made your investment and committed your money. 

Because of the tender process, we cannot guarantee that you will receive UK Treasury bills that you have placed an order for. We take reasonable care to ensure that customer orders will be fulfilled, while also seeking to achieve a good yield.

*Rate subject to success in tender. The rate changes at every weekly tender. Forecast is not a reliable indicator of future performance. Fixed term investment of 1 month.

**Each UK Treasury bill is a fixed investment for around a month, typically 28 days. However, your money will be tied up for a little longer. It will cease to be available for you to withdraw from the cut-off date (usually a Thursday) on the day before we purchase the UK Treasury bill (usually a Friday). On maturity, your money will become available once we receive the maturity value one business day later. Usually the maturity date is on a Friday and you receive the money on the following Monday, so your money may be tied up for 31 days or more.

***You can sell an investment in UK Money Market Funds at any time that the markets are open. It takes a few days for the sale to settle and for the money to be paid to you.

Coming soon

Learn about UK Treasuries with Freetrade’s guide.
Educational page

FAQs

How safe are UK Treasury bills?

UK Treasury bills are considered low risk because they're issued by the UK's Debt Management Office with the backing of the UK Government. Read more here.

The UK government has a “AA”/AA/Aa3 credit rating from all major credit rating agencies, reflecting its strong financial position and ability to repay its debts.

This means that investors in UK Treasury bills are very likely to receive the amount they invested, along with the agreed-upon yield, at maturity.

How does the weekly tender work?

The UK Debt Management Office (DMO) issues new UK Treasury bills through tenders. These are held every Friday (or the last business day of the week).

The tender is where a group of brokers and investment banks called “primary participants” offer to the DMO to invest in UK Treasury bills at the yield they want to receive. The DMO accepts the bids with the lowest yields until all of the supply for that week is used up.

Previously, if you wanted to participate in the weekly tender process, you needed to have at least £500,000 to access this high-quality, short-term government debt.

Soon you can participate through your Freetrade app.

When you place an order for UK Treasury bills through your Freetrade account, it is added to a queue that we process during the weekly tender.

The cut-off time for placing orders is 4:30 pm UK time on Thursday. This means that if you place an order on Tuesday, your order will be submitted in Friday’s tender.

The Treasury bills purchase settles on the working day following the tender, usually a Monday, and they mature within 1 month** usually the Monday four weeks after the purchase is settled. 

When will the yield on a Treasury bill be fixed?

UK Treasury bills are issued every week at a different yield. The yield is determined by market conditions and demand, and the Bank of England base rate.

Before the UK Treasury Bills are issued, the yield is uncertain.

The app will show you the yield that was achieved in the previous week. Therefore, the yield you receive on your UK Treasury bills may be different from that displayed at the time you place your order.

This means that you will not know exactly what yield you will receive until after you have made your investment and committed your money for a month**.

Once a UK Treasury bill is issued, the yield on that UK Treasury bill is fixed for around a month, typically 28 days.

Can I be sure that I will get my Treasury bills?

Because of the tender process, we cannot guarantee that you will receive UK Treasury bills that you have placed an order for.

We take reasonable care to ensure that customer orders will be fulfilled, while also seeking to achieve a good Yield To Maturity. You can read more about this in our order execution policy.

Can Basic customers buy Treasury bills?

Yes.

All Freetrade customers will be able to use the app to buy UK Treasury bills.

Is there a minimum investment amount for UK Treasury bills?

Yes.

You can start investing in UK Treasury bills with as little as £50.

Can I cash out of a Treasury bill before its maturity?

No. 

You cannot sell or cash out of a UK Treasury bill before its  maturity. You need to be certain before you invest that you will not need your money back before the maturity date, plus the time it will take for the money to settle.

What happens on maturity?

When a UK Treasury bill matures, you will receive the amount you invested plus the yield, as cash. The UK Treasury bill expires.

Each UK Treasury bill that you buy will be set up to automatically reinvest the full amount you invested plus the yield. This means that the money we receive for the maturing UK Treasury bill is used to buy the new Treasury Bill, and your money will be locked up for another month**. If your Treasury bill is set to automatically reinvest, you will be reminded before it matures.

If you don’t want this to happen, you can turn off auto reinvesting in the app, or set it to auto reinvest a different amount. If you choose not to reinvest, the cash will stay in your Freetrade account.