What is Non-competitive Bidding of US Treasury Bill?

There are actually two main ways to bid T-Bills at US Treasury auctions: competitively bidding and non-competitively bidding.

1. Competitive Bidding - As a bidder, you specifies the discount rate you are willing to accept. Your bid may be:

• Accepted in the full amount you want if the rate you specify is less than the highest discount rate set by the auction.
• Accepted in the full or partial amount you want if your bid is equal to the highest discount rate.
• Rejected if the rate you specify is higher than the highest discount rate set at the auction.

Competitive Bidding is mostly used by institutional investors.

The picture below shows the competitive bidding result of T-Bill 912797MV6 reopening auction on 2024-12-30:

2. Non-Competitive Bidding - As a bidder, you specifies the full amount (par or face value) only. And you agree to accept the highest discount rate determined at auction. With this bid, you are guaranteed to receive the bill you want, and in the full amount you want.

Non-Competitive Bidding is mostly used by individual investors.

The picture below shows the non-competitive bidding result of T-Bill 912797MV6 reopening auction on 2024-12-30:

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