Treasury bills (T-bills) are short-term government securities sold at a discount and redeemed at face value. They are among the safest investments because governments back them — but 'safe' does not mean free of inflation risk. Here is the clear explanation.
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What Are Treasury Bills?
T-bills have maturities up to one year (typically 4, 13, 26 and 52 weeks). You pay less than face value now and receive the full amount at maturity; the difference is your return.
How Do You Buy Them?
- Via auction through your bank or licensed broker.
- Directly in the secondary market to fit your timing.
- Some apps and banks offer T-bills like savings products.
Why Invest in T-Bills?
- Low default risk (government-backed).
- Liquidity — tradeable before maturity.
- Better returns than many regular savings accounts.
The Risks
- Inflation can erode real returns.
- Interest-rate changes affect resale value.
- Locked money until maturity or a penalty for early exit.
FAQ
Are treasury bills risk-free?
Very low default risk, but inflation and rate risks exist.
What is the minimum to invest?
Minimums vary by market and bank; many allow small retail amounts.
Related: Treasury Bill Rates and How Much Does a T-Bill Cost?
Disclaimer: Educational; check your market's current rules.