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Ask A CPA - Investments & Financial Planning

What Are Treasury Bills ?

Treasury Bills are direct obligations of the U.S. Treasury to finance budgetary needs. Treasury bills are offered in 3 month, 6 month and 12 month maturities. Treasury bills are considered short term IOU's issued by the U.S. Treasury and are commonly considered as the risk free investment asset. Your return on a Treasury bill is the difference between the discount price you pay for the bill and its face value, if you hold it to maturity or the amount you receive for it on a sale before its maturity. You may buy Treasury bills directly from the Federal reserve bank without a fee or from a bank or stockbroker who will charge you a handling fee.

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