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Treasury Bills, T-Bills

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Definition of 'Treasury Bills, T-Bills'

Treasury bills are sold at public auctions every week by means of a competitive bid. The interest rate paid for any issue is determined by this auction process. Treasury bills are also known as T-Bills.
  • 4-week bill (Announced Monday, auctioned Tuesday, settled Thursday)
  • 3-month bill (aka 13-week bill). (Announced Thursday, auctioned Monday, settled Thursday)
  • 6-month bill (aka 26-week bill). (Announced Thursday, auctioned Monday, settled Thursday)
  • 12-month bill (aka 52-week bill). (Announced Thursday, auctioned Monday, settled Thursday)
Treasury bills range in maturities from 4 to 52 weeks. These bills are always sold at a discount to face value. The difference between the sale price and the redemption value is the interest that a buyer will earn on the bill.

Bills sell in minimum increments of $100 face value. i.e. the amount you will pay for the bill will be less than that but the maturity value will be in those increments.

Compare the following Treasury instruments:

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