Demonstration environment. Simulated balances and trades. No real money or securities.
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Foundations

What Treasury bills are

Short-term government debt that pays no coupon. You buy below face value and receive face value at maturity.

A Treasury bill is a short-term debt security issued by a government. In the US, bills are issued by the Department of the Treasury with maturities of one year or less. Many other governments issue similar instruments under their own names and rules.

A bill pays no periodic interest. You pay less than its face value when you buy it, and the government pays the full face value at maturity. The gap between the two is your income.

PurchasePay 98.99MaturityReceive 100.00No coupons during the termIncome: 100.00 − 98.99 = 1.01
One purchase and one payment. Figures per 100 of face value for a 13-week bill at a 4.00% discount rate, for illustration.

What makes bills distinctive

  • Short maturities: regular US terms are 4, 6, 8, 13, 17, 26 and 52 weeks.
  • One cash flow: there are no coupons to track, only a single payment at maturity.
  • Issued at auction: the government sells new bills on a published schedule.
  • A large secondary market: existing US bills can usually be sold before maturity, at the market price.

Key points

  • A bill is bought below face value and pays face value at maturity.
  • The income is the difference between the two, and there are no coupons.
  • Terms run from weeks to one year.

General information only. It is not investment, legal or tax advice. Details vary by market and can change, so check the issuer’s current rules.