Treasury Bills

Treasury bills are short-term debt securities issued by the US Government, which are sold with a discount over their real value. Although some treasury bills are slightly more difficult to get directly than money market funds, many people choose to invest directly in treasury bills before doing so indirectly through a money market fund.

Treasury bills are the most popular short-term individual investments after money market mutual funds. The treasuries bills (T-Bills) are short-term safe-haven investments issued by the US Treasury and are completely backed up by the US Government.

Its risks for negligence are extremely low. To tell the truth if the US Government were negligent to any of its obligations every investor in the United States with is wary over buying them. The treasury bills are considered the safest fixed-income investments of all.

Negotiable non-interest-bearing securities T-bills with maturities of 4.13 and 26 weeks can be accessed in minimum denominations as of $1000 and multiples of these amounts. A T-bill is issued at a discount from its face value. The discount amount depends on the price offered at the Treasury bill auctions at maturity; the bills are redeemed at full face value.

The difference in the amount between the discount value and the face value is considered as interest income. For example, if you buy a 26-week $1000 treasury bill at $985 and hold it until maturity the interest you earn is $15.

Buying and selling T-Bills: You can buy new issues of treasury bills directly in any of the facilities of the Federal Reserve Bank in the primary market without commissions or fees charged.

Also, you can buy new issues of treasury bills indirectly through banks and brokerage firms that charge commissions for their services.

You can also buy and sell existing T-Bill in the secondary markets through banks and brokerage firms.