What Happens When a Treasury Bill Matures?

Maximize Treasury Bills' stunning interest rates with these strategies

U.S. Treasury bills peeking out of an envelope
(Image credit: Bernie-photo at Getty Images)

Treasury bills — better known as T-bills — are debt securities issued by the United States Treasury with maturities of one year or less. They are considered risk-free, the recent debt-ceiling issue notwithstanding, as the US government can always print the money to pay back the debt. And given that they have only a short time to maturity, they have very little sensitivity to interest rate moves. If interest rates rise, the bonds don’t fall much in value. 

For the first time in the investment lives of many Americans, T-bills offer a competitive yield. At time of writing, T-bills offer yields at an annualized 5% to 6% depending on the specific time to maturity. 

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Charles Lewis Sizemore, CFA
Contributing Writer, Kiplinger.com

Charles Lewis Sizemore, CFA is the Chief Investment Officer of Sizemore Capital Management LLC, a registered investment advisor based in Dallas, Texas, where he specializes in dividend-focused portfolios and in building alternative allocations with minimal correlation to the stock market.