T-Bill Reinvestment Calculator (Compound Returns by Rolling Over Treasury Bills)

When your T-Bill matures, instead of cashing out you buy a new one — this is called rolling over. Each time you reinvest, your next bill earns a little more because your balance grows.

💡 Rolling over T-Bills can significantly increase your effective return — even if the rate stays the same — because each cycle earns on a larger amount.

How to Reinvest T-Bills (Step-by-Step)

• Buy a T-Bill with your initial investment
• Wait until it matures
• Use the full maturity amount to buy a new T-Bill
• Repeat the process to compound your returns

This calculator shows exactly how your balance grows with each rollover.

How T-Bill Reinvestment Works (Step-by-Step Example)

The formula per rollover:

• Earnings = Current face value × Rate ÷ 100 × Days ÷ 360
• Tax = Earnings × Federal bracket
• New face value = Current face value + Earnings − Tax
• Repeat each time the bill matures

What is T-Bill Reinvestment (Rolling Over)?

When a T-Bill matures, instead of taking the cash, most investors immediately buy a new T-Bill — this is called rolling over or reinvesting. Because you now have slightly more money (your original investment plus the discount earned), your next T-Bill earns a little more. Over time, this compounding effect meaningfully increases your total returns.

How the Reinvestment Calculation Works

• Rollover 1: Buy T-Bill at purchase price, receive face value at maturity
• Rollover 2: Reinvest full face value as the new face value
• Each rollover: Earnings = Face Value × (Rate / 100) × (Days / 360)
• Compounding: Each rollover's face value = previous face value + earnings

Why Rolling Over T-Bills Makes Sense

A single 6-month T-Bill at 5% earns a certain amount. But if you roll it over twice in a year, the second T-Bill earns interest on a slightly larger amount — giving you a higher effective annual yield than the stated discount rate. This is the power of compounding with T-Bills.

T-Bill Ladder vs Simple Rollover

A simple rollover puts all your money in one T-Bill at a time. A T-Bill ladder splits your money across multiple T-Bills of different durations so that one always matures every few weeks, giving you regular access to cash. Use our Ladder Strategy Calculator for that approach.

Related Calculators

Learn more: What Are Treasury Bills — Complete Guide  ·  Best T-Bill Duration Guide  ·  Are T-Bills Worth It?

Frequently Asked Questions (FAQ)

What does rolling over a T-Bill mean?

Rolling over a T-Bill means reinvesting it at maturity into a new T-Bill instead of taking the cash. This allows your investment to continue earning returns without interruption.

How does compounding work with T-Bills?

T-Bills compound returns when you reinvest them after each maturity. Each new T-Bill is purchased with a larger amount, so it earns slightly more over time, creating a compounding effect.

Is it better to roll over short-term or long-term T-Bills?

Short-term T-Bills are better in rising rate environments, while long-term T-Bills are better when rates are falling. The choice depends on whether you want flexibility or to lock in current rates.

How much more do I earn by reinvesting vs cashing out?

Reinvesting T-Bills usually earns more than cashing out because of compounding. Over time, each rollover increases your earnings, leading to higher total returns.