What is a Treasury bill?
Treasury bills are issued by the us treasury. If you buy treasury bills that means you are lending money to the government. Usually the rates of interest for these bills are less. The interested earned from this bills are subjected to the us tax laws
Treasury bills are issued by the us treasury. If you buy treasury bills that means you are lending money to the government. Usually the rates of interest for these bills are less. The interested earned from this bills are subjected to the us tax laws
Features:
High Security:
Treasury bills are issued in 13,26. and 52 weeks. the law defines the treasury bills need to pay back after those periods
High Security:
Treasury bills are issued in 13,26. and 52 weeks. the law defines the treasury bills need to pay back after those periods
Tax Benefits:
The tax on interest earned on treasury bills are subjected to the us laws. There will be a tax assumption if you buy total IRA bills. Those are exempted as per central & state laws. In some causes if you live in states that having higher taxes, this can help you to earn more under treasury bills
The tax on interest earned on treasury bills are subjected to the us laws. There will be a tax assumption if you buy total IRA bills. Those are exempted as per central & state laws. In some causes if you live in states that having higher taxes, this can help you to earn more under treasury bills
Low Interest Rates:
Treasury bills are usually low interest. The rates of returns on these bills are 5.83 & 5.17 respectively for 3 months period. If you compare with AAA- rated corporate bonds this is very low. Usually for AAA- corporate bonds the rate of returns is 8.07
Treasury bills are usually low interest. The rates of returns on these bills are 5.83 & 5.17 respectively for 3 months period. If you compare with AAA- rated corporate bonds this is very low. Usually for AAA- corporate bonds the rate of returns is 8.07
Short-Term Nature:
Treasury bills are biggest drawback. Every time you need to turn in to new investments from the maturity in order to gain tax benefit from federal income tax.
Treasury bills are biggest drawback. Every time you need to turn in to new investments from the maturity in order to gain tax benefit from federal income tax.
How Treasury Bills Work:
usually treasury bills are issued at discount price, the discount value is consider as interest
usually treasury bills are issued at discount price, the discount value is consider as interest
Example:
You might pay $1000 for a $12, 00 bills, if the bill matures you will get $1200 after the term period. The minimum term is 45 days, all bills are sold in auction, and auction rates will be defined on regular bases.
You might pay $1000 for a $12, 00 bills, if the bill matures you will get $1200 after the term period. The minimum term is 45 days, all bills are sold in auction, and auction rates will be defined on regular bases.
How I Came To Know The Bills Are Auctioned:
Normally auction takes place 4, 13, 26 weeks. Bills are auctioned 13 & 26 weeks on Monday. 4 weeks on Tuesday. 52 weeks bills are auctioned on every month
You can place auction bids using a bank, dealer & broker
Normally auction takes place 4, 13, 26 weeks. Bills are auctioned 13 & 26 weeks on Monday. 4 weeks on Tuesday. 52 weeks bills are auctioned on every month
You can place auction bids using a bank, dealer & broker
