Short-term bond investments can supplement your investment portfolio.
U.S. treasury bills are basically just government bonds but with a different name. While these bills are usually referred to as short-term bonds in lay terms, the phrase “treasury bill” actually has a very specific meaning. Bills usually only have fixed terms that are less than a year. In most cases, these bills will mature after six months, but in some cases they can be as short as less than a week. Essentially, these bills are for a fixed amount of money, but you purchase them for less than face value. The bill is not worth the price you paid for it until after it matures.
These bills are good if you’re looking for a short term investment for your money, and they can be used to diversify your portfolio. However, they are also a type of investment that will require a lot of work and attention on your part. After all, you will have to find another investment opportunity for the money relatively quickly after your treasury bills mature.
However, if you’re looking for a safe type of investment, then you can either purchase treasury bills, notes or bonds. These are all safe investments from the federal government, although the amount of time before maturity will vary.
Treasury bills are sold by the federal government in order to get extra money to pay for government projects and programs. Since long-term bonds are going to give the government money for a longer period of time, you are more likely to get a much higher yield for bonds instead of bills.
While it makes the most sense to wait until maturity – especially since treasury bills mature after a matter of weeks in most cases, you do not have to. In many cases, you will be allowed to sell the treasury bill early. You will not be able to sell the bill for the maturity face value, but you should be able to sell for more than you paid for the bill.
If you want to sell your treasury bills early, you should make sure that you find the best market. You should also make sure that you sell the bills for enough money to at least get your initial investment back after broker fees.