Treasury Bill History in the United States dates back to December 1929. To tackle the unforeseen financial demands of World War I, the US Treasury issued bills, notes and bonds. After World War II, Treasury Bills became the most popular among the short-term government securities.
Treasury Bill is a short term Treasury Marketable Security issued on a discount basis, rather than at par. The price of these Treasury Bills is determined by competitive bidding. The purchase of these bills can be done through these auctions primarily. At the secondary level, the Treasury bills can be bought and sold from traders.
The US Treasury Bills are sold on a weekly basis with a maturity period of within 1 year. The US Treasury issues bills with maturities of:
4 week or 28 day ( 1 month)
13 week or 91 day (3 months)
26 week or 182 day (6 months)
The 13 week and 26 week bills are auctioned every Monday and the results declared the next day. From the auction results we get to know:
Discount Yield or Discount Rate – this is the annualized rate of return based on Par Value and calculated on a 360 day basis
Investment Yield or Equivalent Yield – this is the annualized rate of return based on the Purchase Price calculated on a 365 day basis
Current Price of Treasury Bills
The Treasury Bill History will reveal the gradual rise of acceptance of the Treasury Bills as a Treasury Marketable Security after World War II. This has been possible because:
Very short Maturity Period
Easier to issue and hence less expensive for the Treasury
There is no pre-determined interest rate