On July 31, 2001, the U.S. Treasury began auctioning its newest Treasury bill (T-bill), one with a 4-week maturity.
The Treasury issues debt securities with short-, mid-, and long-term maturities. Treasury bonds have 30-year terms. Treasury notes are available in 2-year, 5-year, and 10-year terms. Treasury bills are available in 13-week, 26-week, 52-week, and now 4-week terms.
As with all Treasury securities, the new T-bill requires a minimum investment of $1,000. These 4-week bills are available to all investors, but they are not available through the government's Treasury Direct Program. This program lets investors bypass banks and brokerage firms to purchase Treasury securities.
The government projects that the 4-week bill will yield approximately the same interest rate as its 13-week bill. The interest earned on Treasury securities is subject to federal income tax, but it is exempt from state and local taxes.
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© Copyright 2001 Raymond S. Kulzick. All rights reserved. 010805.
This publication provides business, financial planning, and/or tax information to our clients. All material is for general information only and should not be acted upon without seeking appropriate professional assistance.