What Are Treasury Bills (T-Bills)?
T-bills are short-term U.S. debt securities backed by the full faith of the federal government.
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What is a Treasury bill?
Treasury bills (T-bills) are a way to invest money without locking it up for too long.
These bills are short-term U.S. debt securities issued by the federal government. They mature in four weeks to one year. This shorter maturity period differentiates T-bills from other Treasury-issued securities.
T-bills are usually sold at a discount and mature to their full face value. Because the U.S. government backs T-bills, they're considered virtually risk-free if held for the entire term.
To put it in plain terms: It’s a loan you’re giving to the government that you’re guaranteed to get back, with a return, when the term ends.
T-bills are typically sold in $100 increments and can be purchased online from the Treasury Department, a brokerage or a bank.
T-bills are a type of Treasury marketable security, which means they can be transferred to another person or sold before they mature. If you sell a T-bill before maturity, you could get more or less than you paid for it, depending on interest rates at the time of the sale.