How to Sell Treasury Bills: Brokerage vs. TreasuryDirect Form 5511

How you sell a Treasury bill before maturity depends entirely on where it’s held. A T-bill in a brokerage account can be sold on the secondary market in a few clicks, with cash settling the next business day. A T-bill held in TreasuryDirect can’t be sold directly at all; you have to transfer it to a brokerage first using a paper form, and that transfer can take several weeks.¹

The government doesn’t buy back T-bills early. There is no early redemption option through TreasuryDirect and no way to shortcut the secondary market. Every early sale, no matter where the bill starts, ends up being sold to another investor through a brokerage.

Selling a T-Bill Held at a Brokerage

If your T-bill already sits in a brokerage account, the process looks like selling any other security. Log in, open your holdings, and place a sell order on the bill. You’ll choose between a market order, which executes immediately at the best available price, and a limit order, which sets a minimum price you’ll accept.

Treasury bills are among the most liquid securities in the world, so buyers are almost always available and bid-ask spreads tend to be narrow.² Government securities settle on a T+1 cycle, meaning the cash lands in your account the next business day.³

Some firms charge a small commission on bond trades, but many have eliminated fees on Treasuries. Check your firm’s schedule before you place the order.

Selling a T-Bill Held in TreasuryDirect

TreasuryDirect doesn’t support secondary market trading. To sell a bill you bought there, you first have to transfer it out to a brokerage account, then sell it from that brokerage the ordinary way. The transfer is paper-based, requires a certified signature, and moves through the mail. Plan on several weeks from start to finish.¹

FS Form 5511

The document you need is FS Form 5511, “TreasuryDirect Transfer Request,” available from the TreasuryDirect forms page.⁴⁵ Four pieces of information do most of the work on the form:

Your TreasuryDirect account number, which is one letter followed by nine digits.
The CUSIP of the specific T-bill you want to move. Each bill has a unique nine-character identifier, and you’ll find it in the account details for that holding.
The par (face) amount of the bill you want to transfer.
The name of the receiving brokerage and the account information it will need to accept the security.

Your legal name on the form must match your TreasuryDirect account exactly. Fill it out in blue or black ink and check every field. Mismatches and errors get the request rejected, and rejection adds weeks.

Getting the Signature Certified

You have to sign FS Form 5511 in front of an authorized certifying officer, not by yourself. A regular notary stamp is generally not acceptable. The officials the form recognizes include:⁶

Officers of banks and credit unions, using the institution’s official seal or signature guarantee stamp. This is the most common route.
Financial institutions that participate in the Medallion signature guarantee programs (STAMP, SEMP, or MSP), which are designed for securities transfers.⁴
Commissioned or warrant officers of the U.S. Armed Forces, for military personnel and their families.
Judges or clerks of U.S. courts, using the court’s seal.

Some banks provide the certification free to existing customers and charge others. Call ahead to confirm the service is offered and ask about any fee.

Mailing and Timing

Once the form is signed and certified, mail the physical document to the address printed on the instructions. There is no online submission. While the transfer is processing, the security is frozen and can’t be traded. Some TreasuryDirect transactions take at least six weeks. Once the bill shows up in your brokerage account, you can place the sell order as described above.

What Price You’ll Get on the Secondary Market

The sale price won’t necessarily match what you paid. T-bill prices move inversely with interest rates: when rates rise, existing bills lose value because newly issued bills pay more; when rates fall, existing bills trade at a slight premium.⁷

For T-bills the swings are usually small because maturities are so short. A 13-week bill has very little room to move compared with a long-dated bond, and the closer a bill is to maturity, the closer its market price sits to face value. Bid-ask spreads on Treasuries are also tight, so the friction between what buyers offer and sellers want is generally minor.

Taxes When You Sell Before Maturity

T-bill income is subject to federal income tax and exempt from state and local income tax, whether you sell early or hold to maturity.⁸

If you hold the bill to maturity, the difference between the discounted purchase price and the face value is reported as interest income on Form 1099-INT.⁹ If you sell early, the reporting splits: the brokerage issues a Form 1099-B for the sale proceeds, and any accrued interest may be reported separately on Form 1099-INT.¹⁰

The discount on a T-bill is treated as interest income, not a capital gain.¹¹ Interest is taxed at ordinary income rates. Because T-bills mature in under a year, long-term capital gains treatment wouldn’t apply anyway, but the classification is worth knowing when you’re planning around a sale.

When Selling Early Isn’t Worth It

If the bill matures within a few weeks, selling almost never makes sense from TreasuryDirect. The transfer alone can outlast the remaining term. At maturity, TreasuryDirect deposits the face value into your linked bank account automatically, with no action and no fees.¹

Small holdings can also be a wash. If rates have risen since you bought the bill and the amount is modest, the price you’d take combined with any brokerage cost may erase whatever you gain by having the cash a few weeks sooner. Selling makes the most sense when the bill is already at a brokerage, when you need real liquidity, or when rates have fallen enough that you can sell at a premium and put the money to better use elsewhere.

1
TreasuryDirect. FAQs about Treasury Marketable Securities
2
Federal Reserve Bank of New York. Measuring Treasury Market Liquidity
3
FINRA. Understanding Settlement Cycles: What Does T+1 Mean for You
4
Department of the Treasury, Bureau of the Fiscal Service. FS Form 5511 TreasuryDirect Transfer Request
5
TreasuryDirect. Forms for Treasury Marketable Securities
6
TreasuryDirect. Signature Certification
7
Federal Reserve Bank of St. Louis. Why Do Bond Prices and Interest Rates Move in Opposite Directions
8
Office of the Law Revision Counsel. 31 U.S. Code 3124 – Exemption From Taxation
9
Internal Revenue Service. Publication 550 – Investment Income and Expenses
10
Internal Revenue Service. Instructions for Form 1099-B (2026)
11
Internal Revenue Service. Topic No. 403, Interest Received