Bonds & rates
Treasury bill
Also called T-bill
Very short-term government debt, issued at a discount and repaying face value within a year.
How it works
T-bills pay no coupon; the return is the difference between the discounted price and the face value at maturity.
They are the practical stand-in for the risk-free rate, and the core holding of money market funds.
Related terms
- Risk-free rateThe return available with essentially no risk of default, used as the baseline for every other return.
- Money market fundA fund holding very short-term, high-quality debt, used as an alternative to a deposit account.
- Zero-coupon bondA bond that pays no interest and is instead issued well below face value.
More in Bonds & rates
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.