What are treasury bills and how do they work?

Question

What are treasury bills and how do they work?

Answer 1

T-Bills are short term treasury Bonds!

Do you know how bonds work? You are loaning the treasury money, they pay you interest on your money and than at maturity of the bonds they pay you back your prinicipal, that is the money you loaned them. T-Bonds are 10, 15,20 or 30 years, T-Bills are usually less than 10 years, like 1,3,or 5 years and T-Notes are less than 9 months. All are triple A rated as the US governement would have to go bankrupt for any to default, that meants not paying you back on the loan.