Treasury bills (T-bills)

Treasury bills are issued by the Department of the Treasury in the United States, this department handles government borrowing. Treasury Bills are tradeable debt instruments. Treasury bills have maturities of between 90 and 360 days.

Treasury bills is the most liquid debt instrument in the entire money market. Treasury bills are discount instruments because they are traded at a discount compared to the nominal amount (face value) received at maturity. The interest rate on treasury bills are refered to as the risk-free interest rate, there is assumed to be no credit risk in these instruments.