What Is a Treasury Bill (T-Bill)?

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on March 29, 2023

US Treasury Bills, commonly known as T Bills, are certificates of debt issued by the United States government that have a maturity date of one year or less.

Because the lifespan of a T Bill is so short, they do not incur regular interest payments.

Instead, the government sells Treasury Bills at a discount from their face value and pays the full face amount upon maturity.

Explore Investment Options with a Vetted Financial Advisor

* required fields

The difference between the discounted sale price and the face value the Bill acts as the interest paid to investors for owning a Treasury Bill.

For example, if a 26-week, $1000 Treasury Bill is discounted to $980, then the owner of the Bill will stand to make a $20 profit. $20 is 2.04% of $980, but 4.08% when prorated annually.

T Bills normally are sold in denominations of $1000 all the way up to 5 million dollars.

In contrast with other U.S. Treasury Notes and Bonds, Common T Bill maturities are 4, 8, 13, 26, and 52 weeks.

The longer the maturity date, the higher return the investment will have.

Treasury Bills (T-Bill) Rates

Because Treasury Bills are backed by the full faith and credit of the US government, T-Bills are considered to be one of the safest investment vehicles available.

Because of the guarantee of profit, T Bills usually offer lower yields than equivalently priced investments, such as traditional bonds.

Treasury Bills (T Bills) FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

Find Wealth Management Firms Near You

Find Advisor Near You