Treasury bills (T-bills) are short-term debt obligations issued by the U.S. Department of the Treasury with maturities ranging from a few weeks up to 52 weeks (one year)

. They are sold at a discount to their face (par) value, meaning investors purchase them for less than their face value and receive the full face value at maturity. The difference between the purchase price and the face value represents the interest earned by the investor

. Key characteristics of Treasury bills include:

• Short-term maturity: Typically available in terms of 4, 8, 13, 17, 26, or 52 weeks

• Issued at a discount: They do not pay periodic interest; instead, the interest is realized at maturity when the bill is redeemed at face value

• Denominations: Usually sold in $100 increments, with some auctions allowing bids up to millions of dollars

• Safety: Backed by the full faith and credit of the U.S. government, making them one of the safest investments available

• Tax treatment: Interest earned is subject to federal income tax but exempt from state and local income taxes

• Liquidity: Highly liquid and can be held to maturity or sold on the secondary market before maturity

T-bills are commonly used by investors seeking a secure, short-term investment option, often to park funds temporarily or diversify a portfolio with low-risk assets

. In summary, Treasury bills are short-term government securities sold at a discount, maturing in one year or less, and are considered a safe, liquid investment with interest earned upon maturity rather than periodic payments