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Treasury Bills

Treasury bills, often called T-bills, are short-term US government securities that mature in one year or less. They do not make regular interest payments. Instead, they are usually sold for less than their face value, and the investor receives the full face value at maturity. Paying $9,800 for a bill that returns $10,000 creates a $200 return before taxes or costs. Current Treasury bill terms range from a few weeks to one year. Their quoted yield allows different maturities and prices to be compared. Bills are not the same as Treasury notes and bonds, which last longer and normally pay interest every six months.

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