Treasury Bills or T-Bills are securities provided by the US Government as an investment instrument which can be bought at a discounted price and sold for profit at the end of its maturity period. For example a T-Bill issued at discounted value of $9800 and a maturity period of 4 weeks could have a face value of $10000. At the end of the 4 week maturity period one can earn a profit of $200 on such a T-Bill.
Treasury Bills are a very safe investment instrument as they are backed by the government which pledges to pay the face value in any adverse circumstance. T-Bills are also immune from any negligence as maybe the case in mutual funds or other managed assets because the government properly manages the investments.
T-Bills are released in the market by government auctions but they can also be bought in the open market. They are easily transferable in exchange of other securities. The return on investment of a T-Bill is much higher than a fixed bank deposit for the same maturity period. Also, they are much safer than investing in mutual funds and stocks which fluctuate during market movements. T-Bills on the other hand change very little due to such volatile movements.
In todays volatile and undecided market situation, T-Bills can be a very powerfull investment instrument which can give you good returns over a short period of time.
Tuesday, February 17, 2009
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