Treasury Bills (T-bills) are short-term government financial instruments that usually take from 91 to 365 days to mature.
The government uses treasury bills as a means to borrow money from the public to fund its activities.
When you buy treasury bills, the government is automatically borrowing from you and pays back when the set maturity date is up.
It is also one of the safest government investment instruments, and this was also proven when it was not included in the domestic debt restructuring exercise.
Here are 10 things to know about treasury bills.
1. Treasury bills are bought weekly.
2. Treasury bills have low to zero risk. Unless in the extreme case of the government’s collapse, your investment is safe.
3. There are no applicable transaction costs when buying treasury bills.
4. T-Bills can be used as collateral.
5. You can buy any amount you want, even exceeding the government’s weekly target.
6. Treasury bill auctions are held on Fridays and issued on Mondays.
7. Interest rates for treasury bills have low volatility and fall less often or deeper than other investments.
8. Interest on T-bills is higher than bank savings account rates.
9. Treasury bills can easily be converted into cash.
10. Both the principal and interest on T-bills can be rolled over to continue with the investment (roll over the principal) and take your interest.
Source: www.ghanaweb.com
