Treasury Bills (T-Bills)
Candlefocus EditorT-Bills can be purchased directly from the Treasury and investors can choose from three different maturities: 4-week, 13-week or 26-week. The 4- and 13-week T-Bills will be auctioned off each week, while the 26-week T-Bills are auctioned off every 4 weeks. The primary benefit of buying T-Bills is the security and short-term return that comes with investing in a government backed instrument, making it a suitable option for institutional investors, retail investors and high-net-worth individuals.
When it comes to the pricing of T-Bills the yield is usually determined by the most current auction results and the maturity date of the T-Bills. The rate at which they will mature can range from 0 % to 1.50%. Based on these factors, the longer the term, the higher the rate.
T-Bills have the advantage of low face value offerings and are available from denominations ranging from $1,000 to $5 million. They are also free from taxation, as taxes for interest received applies to bonds, not T-Bills.
Overall, investing in T-Bills is an ideal option for investors looking for a low-risk, short-term investment option. With an assurance of principal and interest, T-Bills are a secure and reliable investment choice with a quick return. With no taxes imposed on the interest earned and a wide denomination range, T-Bills serve as a great choice for investors who want to maximize their return.