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The Basics of the T-Bill

What Is a T-Bill? A Treasury Bill or T-Bill is a debt obligation issued by the U.S. Department of the Treasury. Of the debt issued by the U.S. government, the T-Bill has the shortest maturity, ranging from a few days to one year. T-Bills are typically sold at a discount to par value (also known as face value). When the bill matures, you are paid par value. The difference between your purchase price and par value represents your interest. T-Bills can be purchased in increments of $100 (in maturity value). They resemble zero-coupon bonds in that they are issued at a discount and mature at par value, with the difference between the purchase price and par value representing the interest paid to the investor. T-Bills are issued in maturities of 4, 8, 13, 17, 26, and 52 weeks. There are auctions featuring different maturities every week except the 52-week T-Bill, which is sold every four weeks. For example, a T-Bill with a maturity of 26 weeks might be sold every week for $999.86 and mature…