Treasury Bill

Definition - What does Treasury Bill mean?

A treasury bill is promissory note that is offered for sale by the United States government.

Treasury bills, also known as "T-Bills," are essentially IOUs that the government sells to people in order to obtain quick cash. In exchange, the government pays back the owner of the treasury bills with interest.

Justipedia explains Treasury Bill

Treasury bills all have maturity dates that are less than one year. Also, they only come in multiples of 100.

For example, if a person buys 100 treasury bills worth $1,000 each, with a six-month maturity date at 2% interest, he or she would receive $102,000 from the government in six months. So, the person would make a profit of $2,000 by purchasing the treasury bills.

The United States has a good credit rating, so many people view treasury bills as a safe investment.

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