Definition
Treasury bills (T-bills) are short-term government securities with maturities of 4, 8, 13, 26, or 52 weeks. Unlike bonds and notes, T-bills don't pay periodic interest. Instead, they're sold at a discount to face value, and the return is the difference between purchase price and par value at maturity.
Formula
T-bill Yield = ((Face Value - Purchase Price) / Purchase Price) × (365 / Days to Maturity)
Example
A 26-week T-bill with $1,000 face value purchased at $980 yields about 4.1% annualized.
FAQ
What is Treasury Bill?
A short-term U.S. government security maturing in one year or less.
How do you calculate Treasury Bill?
A common formula for Treasury Bill is: T-bill Yield = ((Face Value - Purchase Price) / Purchase Price) × (365 / Days to Maturity)
Why is Treasury Bill important?
Treasury Bill helps investors evaluate fixed income and make more informed decisions.