Should I buy T-bills on TreasuryDirect or hold a tokenized Treasury fund?
If the money is going to sit still, buy bills directly on TreasuryDirect: no fee, no intermediary, the full auction yield and state tax exemption. Pay the 0.15–0.50% for a tokenized Treasury fund only when you need dollars that move at any hour, cross borders, or work as on-chain collateral — that mobility is the entire product.
What each layer adds
A bill bought on TreasuryDirect is a direct obligation of the US Treasury registered in your name. There is nothing between you and the sovereign. A tokenized Treasury fund inserts a fund, a manager, a custodian, a transfer agent and a smart contract — each adding an operational failure mode that the direct bill does not have.
In exchange you get something the bill cannot do: transfer instantly, at 3am, to a counterparty on another continent, and post it as collateral in an on-chain market.
- TreasuryDirect: 0% fee, sovereign-only risk, $100 minimum, no state or local income tax on interest
- Tokenized funds: 0.15–0.50% a year, daily NAV, instant transfer, collateral use
- Eligibility differs sharply: TreasuryDirect needs an SSN and US bank; many funds exclude US retail
The liquidity difference cuts both ways
TreasuryDirect holds cannot be sold in place — exiting before maturity means transferring the security to a broker, which takes days. Tokenized funds transfer in seconds on the secondary market, but primary redemption still settles on banking days, so the 24/7 claim applies to moving the token, not to converting it to bank dollars.
Compare net yield, not gross
Fund marketing often quotes the portfolio's gross yield. What you receive is that minus the management fee. Against a direct bill purchase at zero cost, the fee is the whole difference — so always read the published net yield and subtract it from the equivalent bill yield before deciding.
Frequently asked
- Is a tokenized Treasury safer than a stablecoin?
- Structurally, usually yes — it is a regulated fund with a stated NAV and daily reporting rather than an issuer liability. It is also less liquid and more often access-gated.
- Can non-US investors use TreasuryDirect?
- Generally no. It requires a US taxpayer identification number and a US bank account, which is precisely the gap tokenized funds and Treasury ETFs fill.