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| 91-day T-bill auction avg disc rate |
| By Bankrate.com |
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This week |
Month ago |
Year ago |
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91-day T-bill auction avg disc rate
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0.150 |
0.900 |
3.175 |
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What it means:
The U.S. government issues short-term debt at a discount at a competitive
auction, usually on a weekly basis. At a discount means the note is
sold at a discount from face value and then redeemed at maturity at
the full face value. The difference between the discounted price and
the face value determines the yield. The yield on 91-day Treasury
bills is the average discount rate.
How it's used:
The rate is used as an index for various variable rate loans, particularly
Stafford and PLUS education loans. Lenders use such an index, which
varies, to adjust interest rates as economic conditions change. They
then add a certain number of percentage points called a margin, which
doesn't vary, to the index to establish the interest rate you must
pay. When this index goes up, interest rates on any loans tied to
it also go up.
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