Personal Finance•Beginner
How Treasury Bills Work
Discount pricing, maturities and the tax advantage over savings accounts.
By Priya Raman, Real Estate & Alternatives5 min readUpdated 2026-06-19✓ Fact-checked
Treasury bills are short-term US government debt sold at a discount to face value. You buy at, say, $985 and receive $1,000 at maturity; the $15 is your interest.
Why investors use them
- Backed by the US Treasury
- Maturities from four to 52 weeks
- Interest is exempt from state and local income tax
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