Treasury bills (T-Bills), notes and bonds are marketable securities the U.S. government sells in order to pay off maturing debt and to raise the cash needed to run the federal government. When you buy one of these securities, you are lending your money to the government of the United States.
Frequency of interst paid
- T-bills: Because they are sold at a discount from face value, they do not pay interest before maturity. The interest is the difference between the purchase price and the price paid either at maturity (face value) or the price of the bill if sold prior to maturity.
- Notes and bonds: They have a stated interest rate that is paid semi-annually until maturity.
Terms to maturity
- T-bills are short-term obligations issued with a term of one year or less
- Notes are issued in two-, three-, five- and 10-year terms.
- Bonds are issued in more-than-10-year terms.
Edited from investopedia
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