Treasury bills (T-bills) are short-term debt instruments issued by the government to finance its short-term cash needs. They are considered one of the safest investments because they are backed by the full faith and credit of the government.
T-bills are sold at a discount to their face value and do not pay periodic interest. Instead, investors earn the difference between the purchase price and the face value at maturity. For example, you might buy a $1,000 T-bill for $980 and receive $1,000 at maturity, earning $20.
T-bills typically have maturities of 4, 8, 13, 26, or 52 weeks. They are popular among conservative investors and institutions seeking a safe place to park cash while earning a modest return.