In Vol.1 No.1 we introduced the 4-rung T-Bill ladder — a rolling system of short-term Treasury Bills that generates weekly income while preserving every dollar of your principal. If you haven't read that issue, start there.

But there's a question we didn't answer: where do you actually buy the T-Bills?

You have two main options. The first is TreasuryDirect.gov — the U.S. government's own website where you buy directly at auction, cutting out every middleman. The second is your brokerage — E*Trade, Fidelity, Schwab, or wherever you already hold your investments. You can buy T-Bills through either. Both give you the same underlying security. But the experience, the mechanics, and the tradeoffs are meaningfully different.

This issue breaks down both options side by side so you can decide which approach fits your situation.

TreasuryDirect.gov — Buying at the Source

TreasuryDirect is the U.S. Department of the Treasury's direct purchase platform. When you buy a T-Bill here, you're participating in the actual weekly Treasury auction — the same auction that institutional investors, foreign governments, and the Federal Reserve participate in.

You submit a non-competitive bid, which means you accept whatever rate the auction sets. You never pay a commission. You never pay a spread. Every basis point of yield goes directly to you.

How it works

You open an account at TreasuryDirect.gov — it's free and takes about 20 minutes. You link your bank account. Then you schedule purchases of 4-week, 13-week, 26-week, or 52-week T-Bills on their auction schedule. The money is pulled from your bank on the issue date, the T-Bill matures on the maturity date, and the proceeds — principal plus interest — are deposited back into your bank account automatically.

You can also set up auto-reinvestment. When a bill matures, TreasuryDirect automatically rolls it into the next available auction at the new rate. Your ladder runs itself.

The advantages of TreasuryDirect

Zero fees, zero spread. You buy at the auction rate. Period. No commission, no markup, no bid-ask spread. When your broker quotes you a T-Bill yield, they've already shaved basis points off the top. TreasuryDirect gives you the raw rate.

Automatic reinvestment. Set it once. The ladder rolls forward on its own at whatever the current auction rate is. You don't have to log in every four weeks to reinvest.

Completely separate from your brokerage. If your broker has a problem — a technical outage, a margin call, a regulatory freeze — your Treasury ladder is untouched. It lives at the U.S. Treasury. That's a level of security no brokerage can match.

Minimum purchase is $100. You can build a ladder with very small amounts. This makes it accessible regardless of portfolio size.

The disadvantages of TreasuryDirect

The website is not modern. TreasuryDirect's interface was designed in an era before smartphones. It works, but it's clunky. Navigating purchases, setting up reinvestment, and downloading statements requires patience.

Selling before maturity is painful. If you need your money before your T-Bill matures, you have to transfer the security to a brokerage and sell it there. This takes days and adds friction. TreasuryDirect is designed for buy-and-hold investors who plan to hold to maturity.

No mobile app. Everything happens through the website. It works on mobile browsers but it's not optimized for it.

Account setup takes time. The identity verification process can take several days. You can't buy on day one.

Your Brokerage — T-Bills Where You Already Are

Every major brokerage — Fidelity, Schwab, E*Trade, Vanguard, TD Ameritrade — allows you to buy Treasury securities in your existing account. You search for T-Bills in the fixed income section, select your maturity, enter your purchase amount, and execute the trade just like buying a stock or ETF.

The T-Bill you're buying is identical to what you'd get at TreasuryDirect. It's the same security, backed by the same government. What's different is the mechanics of how you buy it and what it costs.

How it works

In your brokerage account, navigate to the fixed income or bond section. Search for Treasury Bills with your desired maturity. You'll see available T-Bills with their current yields and prices. Select one, enter a face value amount (typically in $1,000 increments), and execute. The T-Bill settles in your account, earns its interest, and at maturity the proceeds land in your brokerage cash balance automatically.

Some brokerages also offer Treasury auctions directly — you can participate in the same weekly auction as TreasuryDirect buyers, sometimes at the same rate with no markup.

The advantages of buying through your brokerage

Everything in one place. Your T-Bills sit alongside your stocks, ETFs, and cash. One login. One statement. One tax form at year end. For investors who value simplicity and consolidated reporting, this is significant.

Instant liquidity. If you need cash before your T-Bill matures, you can sell it on the secondary market the same day. Your brokerage handles the transaction instantly. No transfer required.

Modern interface. Every major brokerage has a well-designed, mobile-friendly platform. Buying, tracking, and managing your ladder is significantly easier than TreasuryDirect.

SGOV and BIL as alternatives. If you want T-Bill exposure without the hassle of buying individual bills, your brokerage offers Treasury ETFs that do the work for you. SGOV (iShares 0-3 Month Treasury ETF) and BIL (SPDR 1-3 Month T-Bill ETF) hold rolling T-Bills and pay monthly distributions. They're not identical to owning T-Bills directly — there's a small expense ratio — but for investors who want simplicity above all else, they're an excellent proxy.

The disadvantages of buying through your brokerage

Potential markup on secondary market purchases. If you're buying T-Bills that are already issued (not at auction), your broker builds a spread into the price. It's small, but it exists.

Your Treasury is only as safe as your broker. In practice, SIPC insurance covers up to $500,000 in securities — and T-Bills would be covered. But TreasuryDirect is the Treasury itself. There's no counterparty risk.

Minimum purchase is typically $1,000. Most brokerages require T-Bill purchases in $1,000 face value increments, versus $100 at TreasuryDirect.

Head to Head

Factor	TreasuryDirect	Brokerage
Cost / Fees	Zero — auction rate	Possible small spread on secondary market. Auctions may match TD rate.
Ease of Use	Clunky website. Works but requires patience.	Modern, mobile-friendly. Easy to navigate.
Liquidity	Must transfer to broker to sell early. Days of friction.	Sell same day on secondary market.
Auto-Reinvestment	Yes — set once and ladder rolls automatically.	Varies by broker. Some offer auto-roll, most require manual reinvestment.
Minimum Purchase	$100	Typically $1,000
Consolidated Reporting	Separate account, separate tax form.	All in one account. One 1099.
Security	Held at the U.S. Treasury. No counterparty risk.	SIPC insured up to $500K. Extremely safe but one step removed.
Mobile Access	Works in browser. Not optimized.	Full mobile app experience.
Emergency Access	Requires transfer. Takes days.	Sell and access cash same day.
ETF Alternative	No	SGOV, BIL — T-Bill ETFs with daily liquidity

Which One Should You Use?

The Practical Setup

What About SGOV and BIL?

Worth addressing directly: if you want T-Bill exposure with zero friction, the ETF route is legitimate.

SGOV (iShares 0-3 Month Treasury ETF) holds a rolling ladder of ultra-short Treasury Bills. It pays monthly distributions, has a 0.09% expense ratio — nine basis points — and trades like a stock. Current yield is approximately 3.72%.

BIL (SPDR Bloomberg 1-3 Month T-Bill ETF) is similar, with a 0.1356% expense ratio. Slightly higher cost, nearly identical exposure.

The tradeoff: you give up roughly 9-14 basis points in yield for the convenience of daily liquidity, no account setup, and automatic rebalancing. On $10,000 that's about $9-14 per year. For most investors that's a reasonable price for simplicity.

The case for owning T-Bills directly — either at TreasuryDirect or your brokerage — is that you capture the full auction rate, you know exactly when each bill matures, and you have a clear payment schedule. For disciplined investors who want to know precisely what they're earning and when, direct ownership is worth the extra setup.

The One-Sentence Summary

Use TreasuryDirect for your untouchable emergency reserve — it's the purest, cheapest, most secure way to own T-Bills. Use your brokerage (or SGOV/VMFXX) for tactical cash you might need to move quickly. The ladder builder tells you exactly what either will generate.

Both are legitimate. Both serve different purposes. Neither is complicated once you understand the mechanics. And both share the single most underappreciated feature in fixed income investing: state income tax exemption in all 50 states.

If you live in a state with a significant income tax — California at 13.3%, New York at 10.9%, even Virginia at 5.75% — a T-Bill ladder isn't just yielding 3.65%. It's yielding the equivalent of a 4.0-4.2% taxable rate when you account for the state tax savings. That's a meaningful edge over a high-yield savings account that most investors never think to calculate.

Next issue: SCHD vs VYM — the case for both dividend growth engines, why you probably want both, and how to think about which one deserves more weight in your portfolio.