t-bill
Noun: A T-bill is a short-term debt obligation issued by the U.S. government. It is sold at a price lower than its face value (at a discount) and does not pay periodic interest. The investor's profit is the difference between the discounted purchase price and the face value received when the bill matures, typically after 91 days (3 months), though other maturities exist.
T-bills are considered one of the safest investments because they are backed by the full faith and credit of the U.S. government. They are a key instrument for government financing and for investors seeking a low-risk place to park cash. - The investor allocated a portion of the portfolio to T-bills for stability. - When market volatility is high, money often flows into safe assets like T-bills.
- As a direct object:
- The treasury department will auction new T-bills next week.
- Many corporations invest their excess cash in T-bills.
- With a possessive or modifier:
- The 91-day T-bill rate is a closely watched economic indicator.
- Her investment strategy includes holding short-term T-bills.
- "to roll over T-bills": To use the proceeds from a maturing T-bill to purchase a new one.
- The fund manager decided to roll over the T-bills instead of taking the cash.
- "T-bill auction": The regular process through which the U.S. Treasury sells new T-bills to primary dealers and investors.
- Demand was strong at the latest T-bill auction.
- Treasury bill: The full, formal name for a T-bill. These terms are used interchangeably.
- Treasury security: A broader category that includes T-bills (short-term), Treasury notes (medium-term), and Treasury bonds (long-term).
- Discount security: A general term for any security, like a T-bill, that is issued at a discount to its face value.
- Government bill
- Treasury obligation (short-term)
- Risk-free rate: The theoretical rate of return of an investment with zero risk, often approximated by the yield on short-term T-bills.
- Flight to quality/safety: A financial market scenario where investors move capital into safe assets like T-bills during times of economic uncertainty.
- a short-term obligation that is not interest-bearing (it is purchased at a discount); can be traded on a discount basis for 91 days