What is a Treasury Bill?
What is a Treasury Bill?
Treasury Bills are short-term debt securities issued by the US Government with a maturity of < 1 year.
The US government will pay you a fixed interest rate + pay back your investment, once the T-Bill matures.
Treasury Bills are considered to be of one of the safest assets in the world because they are backed by the full-faith of the US government
The US government will pay you a fixed interest rate + pay back your investment, once the T-Bill matures.
Treasury Bills are considered to be of one of the safest assets in the world because they are backed by the full-faith of the US government
Why invest in Treasury Bills?
Why invest in Treasury Bills?
You can earn up to 5.5% by investing in Treasury Bills.
This is an all-time high since 2007.
Several savings accounts will give you far lower interest.
When you buy a Treasury Bill and hold to maturity, your interest rate is locked in!
This is an all-time high since 2007.
Several savings accounts will give you far lower interest.
When you buy a Treasury Bill and hold to maturity, your interest rate is locked in!
What are the special tax deductions?
What are the special tax deductions?
You don’t have to pay any state or local tax on Treasury Bills.
Unlike your savings account and most other investments.
Unlike your savings account and most other investments.
Can I sell a Treasury Bill anytime?
Can I sell a Treasury Bill anytime?
Duh...of course you canYou can sell your Treasury Bills through the Finvest platform at anytime.
Treasuries is a $25 Trillion market It is one of the most active and liquid markets in the world.
Treasuries is a $25 Trillion market It is one of the most active and liquid markets in the world.
Who is the borrower and lender?
Who is the borrower and lender?
When you invest in a Treasury Bill, the US government is borrowing money from you in order to operate the federal government.
In return, the US government pays you a fixed interest rate.
Essentially, the US government is taking out a loan from you.
Last year, the US government issued $15 trillion in Treasury Securities!
In return, the US government pays you a fixed interest rate.
Essentially, the US government is taking out a loan from you.
Last year, the US government issued $15 trillion in Treasury Securities!
What is principal? (aka par value and face value)
What is principal? (aka par value and face value)
The terms principal, par value and face value all mean the same thing.
It is the dollar amount the US government pays you at maturity.
Typically, Treasury Bills are issued in increments of $1,000 of face value.
It is the dollar amount the US government pays you at maturity.
Typically, Treasury Bills are issued in increments of $1,000 of face value.
What is interest and “yield to maturity”?
What is interest and “yield to maturiy”?
Think of interest as the cost of borrowing, and the benefit of lending. By investing in Treasury Bills, effectively you are giving the US government a short-term loan.
In return, the US government pays you a fixed interest in return for The interest is usually expressed as a annual percentage“Yield to Maturity” is a fancy word for interest. It refers to the interest you receive if you hold a Treasury Bill to maturity.
In return, the US government pays you a fixed interest in return for The interest is usually expressed as a annual percentage“Yield to Maturity” is a fancy word for interest. It refers to the interest you receive if you hold a Treasury Bill to maturity.
What is Maturity Date?
Maturity Date
This is the end date for the T-BillIt’s when the government must repay your investment (the principal) + the interest.
So if you invest $10,000 a 1-year T-Bill with a 5.5% interest rate, the government will pay you back your interest and investment at the end of the 1 year.
So if you invest $10,000 a 1-year T-Bill with a 5.5% interest rate, the government will pay you back your interest and investment at the end of the 1 year.
What are municipal bonds?
What are municipal bonds?
While US Treasuries are issued by the Federal Government, Municipal Bonds or “Munis” are issued by a state, city or local government.
Interest earned on munis are tax-exempt from both federal and state tax
Interest earned on munis are tax-exempt from both federal and state tax