A Treasury bill, often abbreviated as T-bill, is a short-term debt instrument issued by a government, typically through its central bank or treasury department. These bills are backed by the government’s credit, making them a relatively low-risk investment. T-bills have a maturity period ranging from a few days to one year, with the most common maturities being 4, 13, 26, and 52 weeks.
Investors purchase Treasury bills at a discount from their face value, and when the bills mature, the government pays the investor the full face value. The difference between the purchase price and the face value represents the interest earned by the investor. T-bills are commonly used by governments to finance short-term spending needs and by investors as a safe and liquid investment option.
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