T-Bills is a debt instrument issued by a government or central bank with a certain amount to be paid to the holder at a predetermined date.
Characteristics of T-Bills:
a. T-Bills generally have maturities of one year or less
b. T-Bills are considered very safe instruments
c. T-Bills are very easy to be traded
d. T-Bills used as secondary liquidity reserves by financial institutions and corporations
e. T-Bills do not provide direct interest but are sold on the basis of discount, the discount amount determined through the tender process
T-Bills can be used as a means of investment, as this money market instruments are:
a. at no risk
b. have a secondary market
c. risk of loss is very small
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