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learn what is a treasury bill in 2 minutes (animated video)

 What is a Treasury Bill?

USA government needs to finance it’s operation.  This investment has a short maturity.

Three, six, or 12 months.  The treasury bill is paying something less than face value.

Let’s say Jane here wants to invest and Jane will buy a T bill at $10,000 for $9,800 and essential after 12 months or the maturity date she will get 10,000.

If we do the math she will gain $200 or 2.40% Inflation in general is 3% so you’re not making a lot of money.

Remember, T bill are not for risk takers. One advantage is that you’re exempt from possible state taxes but not federal.

So make sure you consult your financial advisors. Another reason to buy T bill is because it is back by the USA government.

You can buy t bills at a bank dealer, broker, or even online from the treasury direct.In summary, t bills is short run, great for non risk takers, but has minimal growth.

Thanks for joining us.

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Professor Savings signing off.

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