Treasury Bills

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Treasury Bill Rates

Issue / Term

Maturity Date

Yield

3 Month Treasury

2/4/2010

0.05%

6 Month Treasury

5/06/2010

0.16%

12 Month Treasury

10/21/2010

0.34%

 

Treasury bills are 3 month, 6 month and 1 year obligations of the US government and are quoted on a yield basis, aand may be purchased at auction directly from the U.S. Treasury or through primary dealers (a series of investment banks). There is a very vibrant secondary market for all US Treasuries, ensuring liquidity (although the price will fall dramatically if yields rise). Therefore, Treasury Bills should only be viewed as a cash equivalent if you are prepared to hold the instrument through until maturity.

Due to a significant rush to safety in short duration Treasuries, yields have fallen dramatically, and these are not competitive with fully-taxable short term Certificates of Deposit or with online savings accounts.

 

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