treasury bill
Noun: 1. A short-term government security: A Treasury bill is a debt obligation issued by a national government to raise funds. It has a maturity of one year or less (commonly 4, 8, 13, 26, or 52 weeks). 2. A zero-coupon security sold at a discount: It does not pay periodic interest. Instead, it is issued and purchased for less than its face (par) value. The investor's profit is the difference between the purchase price and the amount received at maturity.
Treasury bills are considered one of the safest investments because they are backed by the full faith and credit of the issuing government. They are used by governments for short-term financing and by investors as a low-risk place to hold cash. - The government issued new 13-week treasury bills to manage its cash flow. - Investors seeking a safe haven often buy treasury bills during economic uncertainty. - The yield on a treasury bill is determined by the discount from its face value.
- "T-bill": This is the common abbreviation for "treasury bill" used in financial markets and news.
- Money market funds typically hold a large portion of their assets in T-bills.
- Trading on a discount basis: This phrase describes the fundamental pricing mechanism of a treasury bill. Its yield is calculated based on the discount from par value, not on a periodic interest rate.
- A $10,000 treasury bill with a 180-day maturity might be purchased for $9,800, meaning it was traded on a discount basis.
- Treasury security (n): The broader category of debt instruments issued by a government's treasury department, which includes treasury bills (short-term), treasury notes (medium-term), and treasury bonds (long-term).
- Zero-coupon bond (n): A bond that does not pay interest; treasury bills are a specific type of short-term zero-coupon bond issued by the government.
- Government bond (n): A bond issued by a national government. Treasury bills are a short-term subtype of government bonds.
- Government bill: A direct synonym, emphasizing the issuer.
- T-bill: The standard abbreviated form.
- Auction of treasury bills: The primary method through which governments sell new treasury bills to investors.
- The results of today's treasury bill auction showed strong demand.
- Treasury bill rate / T-bill rate: The interest rate (yield) associated with treasury bills, often used as a benchmark for other short-term rates.
- The rise in the T-bill rate influenced borrowing costs for banks.
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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
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