Treasury bills, commonly called "T-bills," "Tare a form of government debt.

Using TTbills, the government borrows money from the private sector. The terms on a treasury bill stipulate that the loan will be satisfied in one year or less, making them a form of short-term borrowing for the shortgovernment.

Treasury bills, like many other forms of government debt, originated during World War I. The U.S. needed money to prepare for war, and because of the world conditions during that time, it was unable to borrow from other countries as it normally would. Instead, it turned to its own citizens, who rushed to buy government bills and bonds to show their sense of patriotism.

The purpose of the T-bill and Trelated securities is to provide the government with a source of capital to make up for budget shortcomings or required investments.

Treasury Bills Potential

In the past, Treasury bills were purchased at banks and through government agencies. As more investment has started to take place online, the government has instituted a program called "Treasury Direct." Under this program, investors can buy T-bills via Internet, and the cost Tof the investment will be automatically debited from their bank account.

T-Bills can be purchased from a bank, stockbroker or directly from the governments Electronic Services for Treasury Bills, Notes and Bond service.

When purchasing your T-Bill youll need to Tdetermine if youll make a competitive or nonnoncompetitive bid. In a non-competitive bid, youre accepting the nonTreasury bills current interest rate without any negotiation. However, you can also place a competitive bid which allows you to state what return you want to earn. In the Philippines, you could buy T-bills through Tbanks. The minimum purchase is around Php100,000.00

What about Treasury Notes?

A treasury note, otherwise known as a T-Note, is a type of security Tissued by the government for the sole purpose of funding the national debt. It is a very popular form of investment because it is considered "risk"risk-free".

LongLong-term fixed interest rate debt security issued by a national (federal) government backed by its 'full faith and credit.' Next to treasury bills and treasury notes.T-bonds are the notes.Tsafest form of marketable investment. They have an active secondary market, and usually pay semi-annual interest. semi-

Treasury bills are issued for terms less than a year. Treasury notes are issued in terms of 2, 3, 5, and 10 years. Treasury bonds are issued in terms of 30 years, and were reintroduced in February 2006

T-bills are short-term obligations issued with a term of one shortyear or less, and because they are sold at a discount from face value, they do not pay interest before maturity. The interest is the difference between the purchase price and the price paid either at maturity (face value) or the price of the bill if sold prior to maturity. Treasury notes and bonds, on the other hand, are securities that have a stated interest rate that is paid semisemi-annually until maturity. What makes notes and bonds different are the terms to maturity. Notes are issued in two-, three-, five- and 10-year terms. two- three- five10Conversely, bonds are long-term investments with terms longof more than 10 years.

Question: What are Treasury Bills, Notes and Bonds? Answer: Treasury bills, notes and bonds are sold by the Treasury Department. These are the safest investments in the world, since they are backed by the Government. Since they are so safe, they tend to have the lowest interest rates. Treasury bills, notes and bonds are sold at auction. This means they can be bought for more or less than the face value, depending on demand. Bidders know Treasury bills, notes and bonds can be resold on the open market. This means their the price can fluctuate further.