T-Bills

Treasury bills, or T-bills, are sold in terms ranging from a few days to 52 weeks. Bills are typically sold at a discount from the par amount (also called face value). For instance, you might pay $990 for a $1,000 bill. When the bill matures, you would be paid $1,000. The difference between the purchase price and face value is interest. It is possible for a bill auction to result in a price equal to par, which means that Treasury will issue and redeem the securities at par value.

Rates & Terms

  • Treasury bills are issued for terms of 4, 13, 26, and 52 weeks. Another type of Treasury bill, the cash management bill, is issued in variable terms, usually of only a matter of days.
  • 4-week, 13-week, 26-week, and 52-week bills are auctioned on a regular schedule.
  • Cash management bills aren’t auctioned on a regular schedule.
  • Bills are sold at a discount. The discount rate is determined at auction.
Advertisements

Tags: ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: