Where Smart Shoppers Shop For Mom's T-Bills

My mother, who is retired, would like to buy United States Treasury securities. I know you can buy them through banks. But is that the best way? How can you buy them directly from the government?

-- J.W., Boston

YOU can place an order directly with Uncle Sam for the price of a 32-cent postage stamp.

For investors having between $1,000 and $10,000, US government Treasury issues are among the most popular fixed-income instruments in the world.

Investors now hold $3.1 trillion worth of US Treasury issues, as of September 1994, the latest available tally.

While banks, major corporations, or large institutional investors (such as pension funds) hold most Treasury securities, individuals own securities worth some $327 billion. And many individuals got them simply by contacting their local Federal Reserve office, obtaining the proper paperwork to open a US Treasury account, and buying the bonds directly from the government.

Currently, some 37 US Treasury offices throughout the nation sell Treasury securities. Check the white pages of your telephone directory, under US Government offices, for the nearest branch. If you can't find an office listed, then write to the Bureau of the Public Debt, Washington, DC 20239. They'll send you a list of local offices. You can go to the office or buy Treasury issues through the mail.

Of course, you can buy Treasury issues through most banks and many stock brokerage firms. But the banker or broker will charge you a fee, usually between $50 and $75.

Treasury securities come in three types: bills, notes, and bonds.

Treasury bills, known as ''T-bills,'' have maturities of three months (13 weeks), six months (26 weeks), or one year (52 weeks) The minimum investment: $10,000. After buying the $10,000 minimum, you can make additional purchases in multiples of $1,000.

Maturities on Treasury notes currently range from two to 10 years. The minimum investment for two- and three-year notes is $5,000. Additional investments can be made in $1,000 increments.

Treasury bonds (currently available only with a 30-year maturity) and Treasury notes of five years and longer, come in units of $1,000 each, with additional purchases available in multiples of $1,000.

To buy from the Treasury you must open what is called a ''Treasury Direct'' account held by the Treasury Department. Interest paid to you can be automatically deposited to your checking or savings account.

Start by asking your local Treasury office for a ''tender'' form, which is a bid form. Ask for the form for the specific security you want to buy. On the form, you will be asked if you wish a ''competitive'' bid, or a ''noncompetitive'' bid. The Treasury recommends you take out a noncompetitive bid, which means that you will get the average interest rate at the auction. You could specify a competitive bid of a certain amount, but if your rate is substantially higher than the accepted bid, it may be rejected.

On the tender form you must note the security you wish to buy. If, for example, you want to buy the three-month T-bill, you would have to send at least $10,000; for a 30-year bond, only $1,000. You can send the money for the T-bill as a cashier's check or a certified check; for the notes and bonds, you can use a personal check.

The tender must be postmarked at least one-day before the federal auction, which is the selling day of the security. Or, you can go to the local Treasury office auction in person.

Treasury issues have set auction dates.

Three-month and six-month bills are auctioned every Monday. One-year bills are auctioned every four weeks, on a Thursday. Two- and five-year notes are auctioned every month, at the end of the month. Three- and 10-year notes are auctioned quarterly, in February, May, August, and November.

And 30-year bonds are auctioned twice a year, in February and August. A list of upcoming auction dates is available (often on a telephone recording) from your local Treasury office.

After you buy your Treasury issue, don't look for the security in the mail. It won't be sent to you. Since 1987 all US government bills, notes, and bonds have been issued in account form. ''These couldn't be any safer or more convenient,'' says Treasury spokesman Peter Hollenbach. For example, if you need account information, ''you can contact any Treasury Direct office around the US, and they can pull your account up on a computer,'' Mr. Hollenbach says.

Treasury bonds are essentially ''risk free,'' says bond expert Sheryl Durham, of Glenmede Trust Company, Philadelphia. The US government guarantees both principal and interest.

Bonds are also not subject to state and local taxes, although you must pay federal taxes on interest earned.

It's worth noting that net after-tax yields on Treasury securities are often higher than comparable bank certificates of deposit. A bigger tax bite is taken out of CD earnings, because they are not exempt from state and local taxes.

US TREASURY SECURITIES

Treasury bills: Also known as ''T-bills,'' come in maturities of three months, six months, and one year. Minimum investment: $10,000.

Treasury notes: Maturities range from two to 10 years. Minimum investment: $5,000 for two- and three- year notes, $1,000 for five years and above.

Treasury bonds: Currently available with 30-year maturities. Minimum investment: $1,000.