Treasury Bill Definition
Treasury Bills are also called T-Bills in the investment terminology. The denomination starts from about $1000, and the maximum anyone can go up is in the region of not more than 5 million.The usual maturity periods are a month, which means 4 weeks, three months or 13 weeks, and six months or 26 weeks.
Tough bidding processes are a way of selling the T-Bills. The returns from the investments is of more importance than say, the payment of fixed interests.According to banking terminology a T-Bill is a note of promise made by the US government. The maturity period is usually not more than a year.
The ones having longer maturity periods are called Treasury notes. Treasury Bonds are the ones with even longer maturity periods than the notes themselves.
The returns from the investment are usually the difference between the price of the bills and their face value at the point of time of maturity.
The US Federal Reserve sells these T-Bills the most when they conduct their Open Market Operations, as that seems to be the most commonly bought form of investment.
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Last Updated on : 18th July 2013