Treasury Bill [T-Bill]

Treasury Bills (T-Bills) are short-term U.S. government debt securities with maturities ranging from 4 to 52 weeks. They are sold at a discount from face value and pay no interest, with investors earning the difference between purchase price and par value at maturity. For example, you might buy a $10,000 26-week T-Bill for $9,750, earning $250 when it matures. T-Bills are auctioned weekly (for 4, 8, 13, and 26-week bills) and monthly (for 52-week bills). They’re considered risk-free as they’re backed by the U.S. government’s full faith and credit. Minimum purchase is $100, with $100 increments up to $10 million per auction. T-Bills are highly liquid, exempt from state and local taxes, and used as collateral for loans. They serve as the foundation for risk-free rate calculations in finance. During flight-to-quality episodes, T-Bill yields can turn negative as investors prioritize safety.