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The Benefits of Laddering T-Bills

July 10, 2024

Laddering Treasury bills (T-bills) is an investment strategy that involves purchasing T-bills of different maturity dates at regular cadences to create a series of staggered maturities and a steady stream of returns. As each T-bill matures, the proceeds are reinvested into new T-bills with a longer maturity, continuing the ladder. This way, the investor always has some T-bills maturing soon, providing liquidity. Whether you're a seasoned investor or just dipping your toes into the world of securities, understanding the ins and outs of laddering T-bills can give you a strategic edge.

How it typically works:

Imagine setting up a series of rungs on a financial ladder, each rung representing a T-bill maturing at a different time. Each rung, or T-bill, matures at a regular interval, giving you periodic access to your investment. Here’s an example of laddering with the 4-week T-bill:

Let's say you have $12M to invest and you want to create a T-bill ladder using 4-week (1-month) T-bills. 

Weeks 1-4: Initial Investments

Each week for 4 weeks straight, you invest $3M in the latest issuance of the 4-week T-bill. 

Weeks 5-8: Ongoing Reinvestment

As each bill matures, you’ll receive your principal $3M investment plus the interest earned. At that point, you reinvest that $3M into a new 4-week T-bill.

By the end of Week 8, you have established a continuous cycle where a 4-week T-bill matures every week, and you reinvest the proceeds into a new 4-week T-bill.

Benefits of T-bill investment 

Consistent cash flow

T-bills provide access to the principal consistently depending on the strategy. In the example above, the ladder was set up to provide the principal plus interest on a weekly basis.


Spreading investments across different maturity dates can help mitigate interest rate risk. This is especially important because T-bill rates can fluctuate daily. In the case of interest rates rising, an investor can use the proceeds from a maturing T-bill to purchase a higher-yielding T-bill.

Risk Management

T-bills are backed by the U.S. government and are already considered low-risk, but through laddering, investors don't have to worry about secondary market price changes because they hold the bills until maturity.


Investors can tailor their ladder to meet specific financial goals. For example, they can ladder in a way that allows T-bills to mature close to the due date of an expense.

How to ladder with Jiko

Jiko makes it particularly easy for clients to set up T-bill ladders because, by default, your T-bills and the proceeds are automatically reinvested in the same bill upon maturity. Using the example above, a Jiko client would only have to make the 4 initial investments during the first month, and the latter would be automatically managed until funds are needed for an expense. 

Jiko's dedicated support team is here to help you get started with setting up your ladder or answering any questions you may have. Simply reach out to our account support team.

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