What are cash management bills and how can I buy them?
The shortest term of T-bills (usually between 1-2 week terms) are called “cash management bills.” They are auctioned infrequently and in irregular intervals, and their purpose is to give the Treasury some short term cash as the need arises. Their investment rate is usually close to the fed funds rate. Depending on current rate expectations for the future (i.e. if rate increases or rate cuts are expected), these can sometimes produce the highest yields of currently auctioned T-bills (of course only for a short duration). They are not sold through TD or Legacy TD, but only through the commercial book entry system. Individuals can participate through brokers, although Citibank Private Bank is the only confirmed broker who offers cash management bills to its clients. The overall gain from seeking to invest in these rather than other T-bills is quite small.
