Treasury Securities: A Guide for Companies

A Basic Guide to T-bills
March 3, 2023

In the wake of the SVB fallout, companies are looking for safe, secure places to deposit their funds. At the same time, companies also want to earn returns on their hard-earned cash.

This has led many companies to look at Treasury securities - notes, bills, and bonds. What do they all mean, and what is the difference between them? Here, we take a look at the similarities and differences between these government-backed securities.

First, some background:

The United States needs to borrow funds in order to fund various governmental activities - everything from building roads and schools to operating our national defense budget to fixing infrastructure. To do this, they issue securities, in which they essentially borrow money from businesses or consumers for a fixed period of time. At the end of the maturity period, they repay their investors the original amount plus a certain amount of interest.

Treasury bills, notes, and bonds are all types of debt securities issued by the U.S. Treasury Department. While they share similarities, there are differences in terms of their maturity periods, interest rates, and denominations. Here’s a breakdown of each:

Treasury bills (T-bills): T-bills are short-term debt securities with maturities of one year or less. They are issued at a discount to their face value and pay no interest until maturity, at which point the investor receives the full face value of the bill. For example you can currently buy a 3 month T-bill expiring June 10th this year for $98.85 and on June 10th the U.S Government pays you $100. T-bills are considered to be among the safest investments as they are backed by the full faith and credit of the U.S. government with no exposure to bank risks.

Treasury notes (T-notes): T-notes are medium-term debt securities with maturities ranging from 2 to 10 years and interest is paid out every six months. T-notes are often used by investors as a way to earn a higher rate of return than T-bills, but they are subject to a higher level of risk given their longer maturity.

Treasury bonds (T-bonds): T-bonds are long-term debt securities with maturities of more than 10 years. T-bonds can potentially offer a higher rate of return among the three types of securities, but also carry the highest level of risk.

Investing in Treasury Securities is a smart and reliable way for companies to ensure their long-term financial stability. With competitive rates, minimal risk, and liquid assets, Treasury securities make an ideal investment choice for companies looking to secure their future. Unlike other forms of investments, Treasury Securities are backed by the full faith and credit of the U.S. government, making them a safe and secure way to achieve long-term success. Investing in Treasury Securities is an easy and accessible way for companies to strengthen their financial position while protecting their assets.

At Treasure, we are committed to the security of funds for all our customer deposits. If you’re interested in learning more, send us a note or click here to get started with Treasure in just 10 minutes.

Source: U.S. Treasury Department

More from the Blog

Stay Updated with Finance and Economy News | The Weekly Treasure
The Weekly Treasure, Week of November 27th, The $100k Tool Bag Orbiting Around the Earth

Explore the latest economic trends, finance insights, and fintech updates. Housing paradox, EU warnings, S&P earnings, Fintech insights, and a quirky $100k tool bag orbiting Earth!

Read More
Resourcesembedded financial services
From Niche to Norm: The Evolving Landscape of Embedded Financial Services

Examine the evolving landscape of embedded financial services, tracing its journey from a niche concept to a norm in the financial industry.

Read More
Resourcesembedded investments
Unlocking Value with Embedded Investments: Opportunities and Challenges

Delve into the concept of embedded investments, exploring both the opportunities and challenges they present in the financial landscape.

Read More
Treasure Technologies Inc.
1324 Clement St
San Francisco, CA 94118
* Returns are projected based on current performance and are gross of fees. Treasure's fee is 35 basis points on Assets Under Management. There is no fee for Treasure Cash. Returns are subject to change daily.

** Treasure Cash accounts are held at Grasshopper Bank, N.A., our FDIC partner bank. Return differentials based on national average checking account rates as of 5/24/2023. Source: FDIC

Website is operated by Treasure Investment Management, LLC ("Treasure"), a wholly-owned subsidiary of Treasure Technologies, Inc., and an investment adviser registered with the U.S. Securities and Exchange Commission ("SEC"). Brokerage services are provided to clients of Treasure by Apex Clearing Corporation ("Apex"), an SEC-registered broker-dealer and member FINRA.

Investing involves risk, including loss of principal. The contents of this website are provided for information purposes only and do not constitute an offer to sell or a solicitation to buy securities. Past performance is no guarantee of future returns.