Does Canada Have Treasury Bills?
Yes, Canada does have treasury bills, and they’re considered to be a very stable form of investment. The only other type of investment that’s considered to be as stable as the treasury bill is a GIC. You may know them as Guaranteed Investment Certificates. These are another form of a fixed-income investment. Each of these requires a minimum investment and is meant to preserve capital, not necessarily be a short-term investment.
In Canada, treasury bills are actually considered to be one of the safest investments, even though they aren’t short-term securities. Even though you’re also loaning money with corporate bonds, they’re riskier and can impact your investing goals. With treasury bills, you always earn more than your issue price.
Treasury Bills Vs GICS
Treasury Bills and GICS (Guaranteed Income Certificates) may seem like the same thing, but they’re different for many reasons. Let’s take a look at how they work and what makes them different.
Similarities
When it comes to T-bills and GICs, they do seem very similar. This is because they’re both fixed-term investments that come at a much lower risk than many other securities. Both T-bills and GICs are also considered to be short-term investments. They’re both locked in for short-term periods, and once the term has ended, you come out with a profit. This is where the similarities between the two end, though.
Differences
Even though the basis of T-bills and GICs is the same, the way they work is very different. GICs are purchased through banks and can be locked in for a longer period of time; GICs have a much longer maturity time than T-bills. T-bills typically range from a few weeks to a year, whereas GICs can have a maturity period much longer. The most common options for GIC maturity are 1 year, 3 years and 5 years.
Another difference between GICs and T-bills is that GICs are purchased through banks, credit unions and other financial institutions. T-bills are government bonds; they’re issued directly by the government of Canada. For this reason, T-bills are considered to be more secure than GICs. Also, the shorter maturity times allow you to reinvest if rates increase, whereas you could miss out on this with GICs’ longer maturity rates.
With both GICs and T-bills, you earn interest income on your investment. That said, how the interest works is different. With GICs, you invest the allotted amount of money you wish at guaranteed interest rates. You’ll earn that rate on your investment until it reaches maturity. You can then reinvest when the maturity ends, or you can choose to keep the money.
With T-bills, the interest you earn on your investment is the difference between what you purchase the T-bill for and the resale price (face value) of the T-bill. When you purchase a T-bill, the rate is how much below face value you purchase the T-bill for. Once the T-bill has reached maturity, it will be purchased back from you at face value.
What you earn is the difference between the purchase price and face value. It’s important to note that T-bills are one of the only securities where both your principal and interest are guaranteed. Due to this, they’re one of the only debt securities issued that are also considered to be fixed-income securities.
Where You Can Purchase Treasury Bills
In Canada, there are plenty of ways you can purchase T-bills. These include financial institutions, brokerages and investment advisors. Let’s take a look at how you would go about purchasing them using these methods.
Bank of Canada
In order to buy T-bills directly from the Bank of Canada, it can be a bit complex, but you would be purchasing them directly from their source. In order to do this, you would need to submit a bid in one of their public auctions. The T-bill will then be awarded to the highest bidder.
With that in mind, it’s important to remember that institutional investors also participate in these auctions. It can be a very difficult process for new investors, but many seasoned individual investors do choose to participate in these auctions as well. They also have a T-bill buyback program if you don’t want to participate in the auction.
In order to buy Treasury bills from the Bank of Canada, you have to have a Canadian bank account as well as a valid Social Insurance Number. If you don’t have these, you’ll be unable to do so.
Financial Institutions
Instead of purchasing T-bills directly from the Bank of Canada, you can purchase them from your financial institution or an independent investment firm. They can be purchased individually or included in an investment portfolio.
A plus side to buying T-bills this way is that you have access to opinions and research from investment advisors. If you’re unsure what to purchase or how to go about purchasing, this can be a great way to get started in the market. It’s also a good option for conservative investors.
Brokerages
If you choose to purchase from brokerages, whether these are online or discount, you’re choosing to purchase through the secondary market. This means that the T-bills have already been purchased through the primary market by an investor and are now being resold.
In order to start purchasing through a brokerage, you first need to create an account. Once you have done this, you’re then able to start purchasing through their trading platform. From here, you are to choose the types of T-bills you’d like to invest in. You get to decide how much you want to invest and choose the maturity date that works best for you. The minimum amount the brokers require when you buy T-bills varies depending on the broker.
If you aren’t comfortable with making investment purchases online, many brokerages also have a phone number you can call to make your investment decisions. These brokerages tend to be lower-cost than other investment firms, which is why so many investors choose to use them.
Investment Advisors
If you’re okay with spending a little bit more when making your investment purchases, an investment advisor is a great way to start investing. They can offer you professional investment advice when purchasing investments from the secondary market. It’s a much more hands-off approach to investing, but if you aren’t 100% confident in getting started, it can be a great way to begin with expert advice.
Rates on Treasury Bills in Canada
Rates on T-bills in Canada change frequently. Sometimes, they’re even different from day to day. One of the key factors on T-bill rates in Canada is the monetary policy and the prime rate in Canada. Generally, the lower the prime rate, the lower the rate on T-bills, and vice versa.
That said, the maturity time also makes a difference in the rate. While there are many different investment options when it comes to maturity, there are a few maturity options that are auctioned off more frequently than others. Let’s look at these current T-bill rates as of June 20, 2025.
- 1 month – 2.66
- 3 months – 2.66
- 6 months – 2.66
- 1 year – 2.66
To show you how frequently T-bill rates can change, let’s take a look at the rates from just a week before on June 11, 2025.
- 1 month – 2.67
- 3 months – 2.67
- 6 months – 2.66
- 1 year – 2.65
While the 1-month and 3-month rates have slightly risen, the 6-month rate has stayed the same, and the 1-year rate has dropped.
Treasury Bill ETFs
In Canada, instead of purchasing T-bills, you can invest in ETFs that track them. How does that work exactly? Well, ETFs, also known as exchange-traded funds, are investments that are traded on the stock exchange. Specifically, they track indexes, but instead of trying to outperform them, they replicate their performance.
Just like mutual funds, ETFs are a type of index fund. They differ from mutual funds, though, because they trade like traditional stocks. The cost of an ETF continually fluctuates throughout the day and represents the net value of the indexes they represent.
When it comes to T-bills, there are plenty of ETFs that represent them and all of their different types. ETFs typically represent a collection of T-bills that are similar. Before choosing to invest in these ETFs, you can see a breakdown of them, their potential yield, the cost, and what T-bills the specific ETF represents.
To give you an idea of a government bond ETF, let’s take a look at one. The one we’re going to discuss is the Canadian Vanguard Government Bond Index ETF (VGV). This specific ETF tracks the Bloomberg Global Aggregate Canadian Government Float Adjusted Bond Index.
This index invests primarily in investment-grade (public) government fixed-income securities. The management fees on this ETF are 0.15%, and the Management Expense Ratio is 0.17%. It has a monthly distribution frequency.
The Cost of Treasury Bills in Canada
When it comes to purchasing Treasury bills in Canada, they’re usually sold at a minimum purchase of a thousand dollars. This is if you’re purchasing the T-bills singularity. If you’re investing in a T-bill ETF or mutual fund, you can spend less depending on its current cost. They also come in money market funds, which are a type of mutual fund that deals in high-quality, short-term debt instruments.
While $1,000 can seem like a lot upfront, it’s important to remember that T-bills are a guaranteed investment because the government backs them. It’s also important to remember that the government of Canada isn’t the only government that issues T-bills. Provincial governments also sell T-bills, so you have plenty of options when deciding where to distribute your funds. The general rules of T-bills are the same for all issuing governments.
T-Bill Yield Calculations
When treasury bills are sold, they’re sold at a discounted price, and then the government pays face value when they’re repurchased. This is how you make a return on your investment. That said, you may want to calculate what percentage you’ll earn. Here’s an example of how you would calculate this.
For example, let’s say you purchase a T-bill with a face value of $1000 for $986.00, with a maturity of 3 months. The first thing you’re going to do is calculate 1000 – 986 and divide it by 986. You’ll then calculate 365 days in a year divided by 90.
Once you have those 2 numbers and multiply them together, you’ll get the percentage of yield. In this example, the yield is 5.8%. This means on a 3-month investment, you’ve earned a 5.8% return. You can use this same formula to calculate the yield on any investment amount.
(Face Value – Purchase Amount) / Purchase Amount x (Days in a Year / Days to Mature) = Yield Percentage
In our particular example, this formula looks like this: (1000 – 986)/986 x (365/90) = 5.8%
What is the Current Canada T-Bill Yield?
Canada T-Bill yields vary based on their trading day. However, here are the most current amounts:
- 3-month T-Bill: 2.30%
- 6-month T-Bill: 2.39%
- 1-year T-Bill: 2.61%
How T-Bills are Taxed in Canada
Any money you make on T-Bills that are held in a non-registered account is considered interest income. These interest payments are then seen on your income tax return as regular taxable income and will be taxed at your marginal tax rate.
However, if these funds are held in a registered account, then you don’t have to pay any tax on the regular interest that you earn. Unless these funds are in a TFSA, though, you don’t have quick and easy access to them. Withdrawing funds from an RRSP can trigger a withholding tax that can be extremely expensive.
Are T-Bills Safer than GICs
While GIC’s are considered to be a safe investment, a T-Bill is actually safer because it’s backed by the federal government. Even though they’re both fixed-income assets, GICs are riskier assets because they’re only backed by individual banks.
The Minimum Investment Amount for Canadian T-Bills
While minimum investment amounts vary when investing on the stock market, with T-Bills, the minimum investment amount is usually $1,000 for individual face-value denominations. However, depending on your online brokerage or bank, the minimum purchase size is often $5,000 to $10,000.
T-Bills ETFs Vs. Individual T-Bills
While both of these options are good for a balanced portfolio, they differ significantly. Here’s a look at how.
| T-Bills | ETFs |
| These have a guaranteed return at their maturity date. | There’s no maturity date and principal fluctuates with interest rates. |
| Tied to a holding period and selling early can result in a loss. | Can be bought and sold at anytime. |
| Typically sold in increments on $1,000 | Can be bought for the price of a singe share. ($50 – $100) |
| No fees if bought through a zero–commision broker. | Small management fees. |
| Income earned is the difference between the purchase price and the price at maturity. | Earn money through regular distribution and dividend payments. |
How T-Bill Auctions Work in Canada
Government of Canada T-Bills are sold at public auctions that are held by the Bank of Canada. They handle these auctions on behalf of the federal government, and the newly issued T-Bills are only sold to Government Securities Distributors, which are primary dealers, major banks, and investment dealers.
When it comes to bidding, distributors are able to submit competitive and non-competitive bids. Competitive bids state the specific yield price they want, and non-competitive bids accept the average yield determined by the auction. The bids themselves are usually made in multiples of $1,000, and all winners pay the price they bid instead of everyone paying the same.
Provincial Vs. Federal T-Bills
Both provincial and federal T-bills are zero-coupon, short-term, and low-risk debt securities that are a great option to build a balanced portfolio. The main difference between the two is the issuer. Federal T-bills are backed by the federal government, whereas provincial T-bills are backed by the provincial government.
Holding T-Bills in TFSAs Vs. Non-Registered Accounts
The main difference between holding treasury bills in a TFSA and a non-registered account is the tax treatment. When your treasury bills are in a TFSA, as of your interest income is exempt from taxes. There is a contribution limit, though, and you have to make sure you stay under it to avoid any penalties.
If you hold your treasury bills in a non-registered account, then you have to pay your full marginal tax rate on any amounts that you may earn. However, there are no contribution limits that you have to worry about going over.
T-Bill Rates Vs. High Interest Savings Accounts
Both T-Bill rates and High Interest Savings Accounts are relatively low-risk investments that offer some return on your investment. However, there are some differences. T-Bills offer slightly higher fixed yields and have good tax advantages for those who are in higher tax brackets or are long-term earners.
HISAs offer you instant access to funds, better liquidity, and even competitive rates, while giving you access to the funds for everyday emergencies. Accessing your treasury bills early can result in a loss of earnings.
Laddering T-Bills for Steady Income
A T-Bill is a cash management strategy that allows you to buy T-Bills with staggered maturity dates. This allows you to access your money at steady intervals of your choosing, instead of investing it all into one T-Bill. This also allows you to take advantage of new interest rates when you refinance, instead of having to lock into one interest rate for an extended period of time.
Purchasing US Treasury Bills in Canada
While it’s much simpler to purchase Canadian Treasury Bills, you are able to purchase US ones. The best way to do this is to contact the fixed-income department at your brokerage. They can help you find the T-bills you want to purchase. Keep in mind, though, that these are still US securities, so you will be taxed differently on these.
Are US Treasury Bills or Canadian T-Bills Better?
Whether or not US Treasury Bills or Canadian T-Bills are better is based on your situation. This includes your local tax situation, your risk tolerance with currency fluctuations, as well as the yield spread between the central banks.
That said, it’s better to stick to Canadian T-Bills if you want to keep your funds in Canadian dollars to avoid a currency risk, or if you’re investing in a Canadian registered account. It’s also a good choice when you want to avoid foreign exchange trading fees.
Investing in US Treasury Bills is a good choice when you want to diversify your portfolio into US dollars, or you have excess USD cash that you want to earn interest on. If can also be a good option if you’re comfortable with the currency risk and the US dollar is high enough to offset the cost of foreign exchange fees. .
