A Treasury bill, or T-bill, is a short-term debt issued by the U.S. government. It’s like an IOU from the government, promising to repay the borrowed money within one year or less.
Treasury bills are considered very safe because they are backed by the U.S. government. They don’t pay interest like regular bonds, but they are sold at a discount to their face value. When the T-bill matures, the government pays the full face value, and the investor earns the difference as their profit. Investors like Treasury bills because they are low risk and easy to buy and sell. They are often used as a place to temporarily keep money or as a way to earn a small return without taking on much risk.
Treasury bills are important in the financial world because they help the government raise money for short-term needs and provide a benchmark for short-term interest rates.