Why a Treasury bill has several different yield numbers

Face value, purchase cost and day-count basis change the calculation.

A single holding has one cash profit

A bill bought for 9,800 and redeemed for 10,000 generates 200 before fees and tax. The holding-period return divides that 200 by the 9,800 paid.

Annualization changes the label

Bank-discount yield uses face value as denominator and a 360-day year. Our simple purchase-price yield uses invested cost and a 365-day year. Neither denominator should be silently swapped. Treasury auction investment-rate conventions have additional details, particularly for longer bills; the simple yield on this page is labelled explicitly.

Effective annual return requires reinvestment

Compounding a short holding-period return to a year assumes equivalent opportunities will remain available. It is a comparison scenario, not a promise that the next auction has the same rate.

TreasuryDirect explains bank-discount pricing. Compare the conventions with your own numbers.