What Is a Bill Auction?

A bill auction is a public auction, held weekly by the U.S. Treasury, of federal debt obligations—specifically, Treasury bills (T-bills), whose maturities range from one month to one year.1 As of May 2021, 24 authorized primary dealers must participate in the auction and bid directly upon each issue.

A bill auction is an official manner in which all U.S. Treasury bills are issued.

The process starts with the central bank announcing how much money it intends to borrow. Details like the term length of the bonds and the auction date are included in the announcement.

Interested market players like broker-dealers, institutions, and individual investors then submit the number of bonds.