Spanish Treasury bill yields: how they work and how to buy

What the yield on a letra actually is

A Letra del Tesoro pays no interest. There is no coupon, no quarterly payment, nothing to collect along the way. You pay a price below the €1,000 nominal and, on the maturity date, the State repays the full €1,000. The entire return is that difference, which is why letras are called securities issued at a discount.

Two consequences follow, and both are worth fixing before going further.

The first is that price and yield are the same information seen two ways. They are not two independent figures to look up separately: if you know one and the days remaining to maturity, the other is determined. The lower the price, the higher the yield.

The second is that the outcome is settled on the day you buy. Hold the letra to the end and you know exactly how much you will receive and when. That is the fundamental difference from almost any other investment, and it is also why the interesting question is not "what does it yield" but "what price will I be charged", which is what an auction decides.

There is an exception almost nobody mentions and it is worth knowing: the Tesoro's own site says letras are issued "at a discount or at a premium", meaning the price can also exceed the nominal. That happened for years. Between 2015 and 2022 there were letra auctions allotted at negative rates, in which the buyer paid more than €1,000 to receive €1,000. It is not a textbook hypothetical.

How it is calculated: the Tesoro's two formulas

The calculation is not decided by the market or by custom: it is printed in a norm. Article 14.1 of Orden ECM/2/2026, the order that creates this year's State Debt and governs its auctions, publishes two formulas and the boundary between them.

Where "P" is the price as a percentage of nominal, "d" is the days remaining to maturity and "i" is the effective annual rate as a decimal.

Look at the denominator: 360 in both. The Tesoro itself calls it by its market name, the ACTUAL/360 convention. Annualising over 365 days is the most repeated error in home spreadsheets, and it always produces a lower yield than the official one.

The "376 days" rule that almost every guide copies

Search any Spanish guide on Treasury bills and you will find this sentence: up to 376 days simple interest on a 360-day year is used; beyond that, compound interest on a 365-day year. It is in manuals, in course notes and in half the pages competing for this query.

It is not what the norm says, and it is not what the auctions do.

The check is direct, because the Tesoro publishes its own results. The twelve-month letra auctioned on 1 September 2026 was issued on the 4th and matures on 10 September 2027: 371 days, past the natural year but inside the old 376-day boundary. Its marginal rate was 2.846% and the published price 97.150.

• With the compound formula over 360: 97.14942, published as 97.150. It matches.
• With the simple formula: 97.15061, published as 97.151. It does not.

The difference is a thousandth, but it is not noise: prices are published rounded up to three decimals, and that rule reproduces exactly 40 of the 42 accepted-request prices printed across three separate results resolutions. With the wrong formula, a 548-day letra is already off by almost €0.60 per €1,000 of nominal.

In practice this affects little: across the whole 2026 calendar only the September and December twelve-month letras cross the natural year, and they do so by six days. But it is the difference between agreeing with the official gazette and not.

Why your figure does not match the Tesoro's

If you have tried to reproduce an official figure and got a different one, there are three causes and it is almost always one of them.

1. The day-count basis. As above: 360, not 365.

2. Days run from issue, not from the auction. The securities are put into circulation three business days after the auction is resolved, and the term runs from that issue date. The twelve-month letra auctioned on 13 January 2026 is issued on the 16th and matures on 15 January 2027: 364 days. Counting from auction day adds three days that do not exist.

3. What is published is rounded and what is charged is not. Article 12.3 requires the weighted average rate to be rounded down to three decimals, while the price is published rounded up. And point 3 of every results resolution says so expressly: "although the prices of competitive and non-competitive requests are published to three decimals, for the purpose of calculating the amount payable on the nominal allotted to each request the prices are applied with every decimal". The figure in the table is not exactly the one you were charged.

How the auction works and what price you end up paying

Tesoro auctions are of a type called convencional corregida, mixing the Dutch single-price auction with the conventional multiple-price one. It sounds technical and it has a very concrete consequence for anyone buying small.

For letras, competitive requests are made in interest-rate terms, not in price, and are ranked from the lowest to the highest rate asked. The Tesoro decides how much it wants to issue and the highest rate it will accept, the marginal rate. From the accepted requests it computes the weighted average rate. Article 12.4.b) then allots as follows:

• You asked for a rate at or below the weighted average: you are allotted at the weighted average.
• You asked for a rate above the average but within the maximum accepted: you are allotted at your own rate.
• You asked for a rate above the maximum accepted: you are left out and buy nothing.

Read that again, because almost no guide draws the conclusion. Bidding below the average rate does not hurt you, but it does nothing for you either: you will be given the average anyway, which is exactly what a non-competitive request would have secured with no risk of being left out. The non-competitive request is not the beginner's option: it is at least as good as any cautious bid, and the only way to beat it is to accept rejection risk.

The twelve-month auction of 2 September 2025 shows this in published numbers. The weighted average rate was 1.986% and the allotment ladder ended like this:

The last two rows are the same price. Whoever bid aggressively below the average rate and whoever did not bid at all paid identically.

One limit and one condition are worth remembering. The limit: you may submit only one non-competitive request per security, and that cap includes scheduled reinvestments, so an automatic reinvestment uses it up. The condition: article 12.4.d) fills non-competitive requests in full provided at least one competitive request was accepted and the weighted average rate is not negative.

When the auctions are and how late you can bid

Letras are generally auctioned on Tuesdays. Six and twelve-month bills in the week of the monthly redemption; three and nine-month bills the following Tuesday. That makes two auctions a month, August included. The exact dates are in the Tesoro's annual calendar, because local holidays move them.

What surprises people is not the calendar, it is the deadline. Taking the auction of 13 January 2026 as the example:

The internet channel closes first, three days before the counter, which is the reverse of what almost everyone assumes. On top of that, if you bid online the only accepted payment method is a transfer and the funds must be deposited at the Banco de España at least two days before the auction, so in practice you have to move earlier still. At a branch the process is in person and by appointment, until 14:00 mainland time and 13:00 in the Canaries.

How to buy: the three routes

Online, on the Tesoro's site. This is the Servicio de Compra y Venta de Valores, and it needs a class 2CA electronic certificate, Cl@ve or the DNIe. It is restricted to individuals resident in Spain: companies, non-residents and minors cannot use it.

At a Banco de España branch, opening a direct account. In person and by appointment, and it also requires residence in Spain, though companies can operate here.

Through your bank or a securities firm. This is the only route open to non-residents, and the one that spares you obtaining a digital certificate. In exchange, the firm charges whatever its fee schedule says.

On cost there is one precision worth making. Direct accounts carry no fee to buy, hold, open or maintain. But the Banco de España does charge for the transfer that pays you the redeemed amount: 1.5 per thousand, with a minimum of €0.90 and a maximum of €200. On a single three-month letra at 2.4%, the gain is €5.57 and that minimum takes 16% of it. The fee falls on the transfer, so anyone reinvesting rather than withdrawing does not trigger it, and the Tesoro's service lets you schedule that reinvestment.

And one last thing that catches people out on a first purchase: at auction you pay €1,000 per letra whatever it is worth. The advance deposit on letras is 100% of nominal. The Banco de España refunds the excess between the deposit and the real price once the auction is resolved.

"Three months" is not always three months

The term names are approximate, and letras are fungible: the Tesoro reopens the same reference again and again, so what is sold to you as a three-month letra may be exactly the same security someone else bought nine months ago as a twelve-month one.

In the 2026 calendar, 15 January 2027 is the maturity date of four separate auctions: the twelve-month letra of January, the nine-month of April, the six-month of July and the three-month of October. Four names, one security.

The real terms are not round either. In 2026, eleven of the thirteen "three-month" letras run 84 days; the "twelve-month" ones run 364 days except September and December, which run 371. If you are going to calculate, use days, never months.

What Spanish tax takes

The difference between what you paid and what you receive is savings income under article 25.2 of the income tax law, and it goes into the savings base, whose 2026 scale is this:

The top band has been 30% since 1 January 2025, under the seventh final provision of Law 7/2024. It is worth saying because the Tesoro's own tax page still publishes the earlier 28%.

Four more points, none of which tends to appear on the pages competing for this query.

There is no withholding, with one exception. Article 75.3.b) of the income tax regulation puts the return on letras outside withholding, and its second paragraph puts it back: institutions that enter into contracts for accounts based on operations in Letras del Tesoro with their clients are obliged to withhold on what those accounts yield. Buying letras and holding a bank product referenced to letras are not the same thing for withholding purposes.

The whole tax falls in a single year, and it can be a long way off. Article 14.1.a) allocates capital income to the period in which it is due, which for a letra is maturity. Buy a twelve-month letra in November 2026 and the gain enters the 2027 return, filed in mid-2028. Since nothing was withheld, that money sits in your account for a year and a half before the tax office asks for it.

The scale is progressive across all your savings income. Deposit interest, dividends and the letra's gain accumulate in the same base. The letra's gain does not start again at 19%, it stacks on whatever you already have.

A loss on an early sale is not a capital loss. It is negative savings income, and article 49 treats it differently: it is offset first against other savings income and only then against capital gains, capped at 25% of those gains, with the remainder carried forward four years. Article 25.2.b) also allows incidental costs of acquisition and disposal to be counted where they are properly evidenced, so the commission your bank charges reduces the return you declare.

If you need the money sooner

You can sell on the secondary market at whatever price prevails, which depends on how rates have moved since you bought. If they have risen, the price will have fallen and you can lose money. The guaranteed outcome only comes from holding to maturity, which is why the term you pick should be the one you can genuinely wait out.