US Treasury Bills

From Financial Literacy Wiki

US Treasury Bills are obligations sold by the US Treasury to help finance federal expenditures. Commonly known as T-bills, they are basically pure discount bonds, meaning they do not pay interest prior to maturity.Instead, they are sold at a discount of the par value to create a positive yield to maturity. Treasury bills are considered by many to be the most risk-free investment for U.S. investors and the current interest rate is the risk free interest rate used in many securities evaluation models. For Singaporeans, it is the prevailing interest rate of Singapore government bonds, that are used.

Treasury bills (or T-bills) mature in one year or less but are commonly issued with maturity dates of 28 days (~1 month), 91 days (~3 months), and 182 days (~6 months).