Asset module
Short-Term Treasuries
T-bills, notes, auctions, ladders.
Key lessons
- ◆T-bills come in 4, 6, 8, 13, 17, 26 and 52-week terms.
- ◆Bills are sold at a discount; you receive face value at maturity.
- ◆Minimum purchase on TreasuryDirect is $100.
- ◆Interest is subject to federal tax but exempt from state and local income tax.
- ◆A ladder staggers maturities to provide regular liquidity.
- ◆Auctions follow a published schedule; reinvestment can be automatic.
Risks
- • Reinvestment risk when rates fall.
- • Selling before maturity on the secondary market may produce a loss.