In U.S. personal finance, a short-term Treasury security that matures in one year or less is a Treasury bill.
Treasury bills, often called T-bills, are debt obligations issued by the United States Department of the Treasury. Unlike many bonds that make periodic coupon payments, T-bills are commonly sold at a discount to their face value and pay the face value at maturity. The difference represents the investor’s return before taxes and costs.
T-bills are categorized by short maturities, while Treasury notes generally have intermediate maturities and Treasury bonds have longer maturities. The exact terms offered can vary, and Treasury securities are subject to market pricing when sold before maturity.
T-bill interest is generally subject to U.S. federal income tax but exempt from state and local income taxes. They are often discussed as low-credit-risk investments because they are backed by the U.S. government, though their prices and reinvestment outcomes can still vary.