Treasury Bonds and Treasury Bills

What are “Treasury Bills”?

U.S. Treasury bills, or “T-bills,” are short-term debt obligations backed by the U.S. government that mature in one year or less, and are purchased for a price less than or equal to their face or par value. When they mature, the government pays the face value plus any interest that may have accrued. The interest is the difference between the original purchase price of the bill and what ultimately is paid at the time the bill matures. As an example, if you purchase a $10,000 treasury bill for $9,750, and hold it to maturity, you would be paid $9,750 plus interest of $250.


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