Treasury Bills, commonly known as T-Bills, are debt instruments issued and backed by the full faith and credit of the U.S. government. The U.S. Treasury Department issues them to meet the financing needs of the federal government. T-Bills are one of the most secure, low-risk investments you can make as they are issued with a guarantee of principal and interest with full repayment upon maturity. They are often referred to as “cash equivalents” as the short-term investment hold the same level of liquidity.

T-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.