Treasury bill (T-bill),
Definition of Treasury bill (T-bill):
A short-dated UK or US government security, yielding no interest but issued at a discount on its redemption price.
Short-term (usually less than one year, typically three months) maturity promissory note issued by a national (federal) government as a primary instrument for regulating money supply and raising funds via open market operations. Issued through the countrys central bank, T-bills commonly pay no explicit interest but are sold at a discount, their yield being the difference between the purchase price and the par-value (also called redemption value). This yield is closely watched by financial markets and affects the yield on municipal and corporate bonds and bank interest rates. Although their yield is lower than on other securities with similar maturities, T-bills are very popular with institutional investors because, being backed by the governments full faith and credit, they come closest to a risk free investment. Issued first time in 1877 in the UK and in 1929 in the US.
How to use Treasury bill (T-bill) in a sentence?
- The treasury bill was finally issued, after months and months of arguing and disagreeing with one another in the company.
- Today, there is a widely-held perception that the U.S. government is the safest credit risk on the planet - heck, mathematical economists even deem the yield on a U.S. Treasury bill to be the ‘risk-free rate of return.’.
- You can sometimes get a very good interest rate on a treasury bill if you can handle having your cash tied up.
- You should always keep any treasury bill you have in a safe place so that you are ready to cash it when the time comes.
Meaning of Treasury bill (T-bill) & Treasury bill (T-bill) Definition