IPO 3 month and 6 month Treasury Bills on II

[Jon277]

3 Months UK Treasury Bill Maturing on 16-Jun-2025
Offer Status
Open
Closes Thursday 13th March 2025 at 13:30 UK local time

UKTBs differ from conventional UK Gilts in that they have a 0% interest rate. The investment return comes solely from the difference between the price the Government sells to investors at (typically less than £100) and the redemption price the Government pays back (£100).

Based on previous issues the annualised yield is expected to be around 4.3%, but this is not guaranteed. The actual yield you will receive is not known until the UK Treasury Bills are issued.

Minimum investment: £1,000
You will not pay a purchase commission or stamp duty on this subscription. We will not receive a fee and/or commission for participating in this Offer.

Same info for 6 month just different date redemption

6 Months UK Treasury Bill Maturing on 15-Sep-2025
Offer Status Open
Closes Thursday 13th March 2025 at 13:30 UK local time

Available through Interactive Investor -

[Alaric]

Available through Interactive Investor -

Other Brokers as well I would expect.

It's becoming something of a regular offer. Unless restrictions are introduced in the Budget, it's a way of rolling over cash balances in an iSA.

Outside an ISA the gain from strike price to maturity is taxed as interest income.

[heathmount]

Hi

I realise we won't know what the actual yields will be until issue time but generally would people expect the rate on the 3 moth to be higher or lower than the 6 month at issue? I can't seem to find what controls this?

[Alaric]

I can't seem to find what controls this?

I would think expectations of future interest rates mostly. If you expect interest rates to fall, you might chose the longer issue. Conversely if you expect them to rise. There might also be a modest premium for locking your money away longer.

[shaunm]

Hi

I realise we won't know what the actual yields will be until issue time but generally would people expect the rate on the 3 moth to be higher or lower than the 6 month at issue? I can't seem to find what controls this?

Looking at https://tradingeconomics.com/united-kingdom/government-bond-yield may give one a clue on current yields
Both 3 & 6 months seem to be around 4.45%

I'm applying for both due 3 & 6 month issues to current market turbulence
I already have some already

[heathmount]

Thank you shaunm for the trading economics link, that's very helpful.

[dealtn]

I can't seem to find what controls this?

I would think expectations of future interest rates mostly. If you expect interest rates to fall, you might chose the longer issue. Conversely if you expect them to rise. There might also be a modest premium for locking your money away longer.

Not really. Its if you think they will rise, or fall, more than the market currently does, that matters.

If you expect interest rates to fall, but not by as much as the market is currently predicting, you want to buy the shorter dated bill. In 3 months time you can reinvest it in the then lower rate (but higher than is currently predicted by the futures market) and get a better return than the currently available 6 month interest rate.

[shaunm]

Another good site for gilts is https://www.dividenddata.co.uk/uk-gilts-prices-yields.py

I have been investing in short term gilts of duration between 1 year to 18 months, but currently there is nothing with a reasonable yield
Just had a large gilt holding maturing, thus these T bills come in handy to "park cash" within both SIPP & ISA accounts.
Note that these T bills need to be held to maturity (no trading possible).
Having a number of these T-Bills maturing in the future (that is upto 6 months), ensures one has a sufficent cash balance for monthly pension within draw-down SIPP pension.
Very similar practice when I was working for a company (back 15 years ago), placing surplus cash into Fixed Term Treasury Deposits (usually of around 45 to 60 days) with the major banks, maturing just before "payroll day".

Currenty waiting in 3 to 6 months time to greater turbulence in the major stock markets! (Qtr company announcements)

[formoverfunction]

I have these links saved, maybe someone else will also finf them useful:

https://www.dmo.gov.uk/publications/?of ... tYear=2024

https://www.dmo.gov.uk/data/pdfdatarepo ... Code=D2.2A

https://www.dmo.gov.uk/data/gilt-market/

and the IPO pages for ii & HL

https://www.ii.co.uk/ipos

https://www.hl.co.uk/shares/ipos-and-new-issues

I have placed an order for the 6 month issue auction

[Padders72]

ii, Freetrade and others have been doing these for a while now. We have talked about them before but it is not obvious when new ones are released (on ii at least) so a heads up is useful. Some earlier chats:

viewtopic.php?t=43812

viewtopic.php?t=45531