Treasury bills and certificates of deposit (CDs) are two of the most popular forms of investments for individuals looking for a safe, low-risk option. Treasury bills, also known as T-bills, are short-term securities issued by the U.S. government that mature in 4 to 52 weeks. CDs are similar to T-bills, with slightly longer maturity terms and higher yields. Both are backed by the U.S. government and can be used for short or long-term investments.
T-bills are highly liquid, with maturities ranging from a few days to 52 weeks, and they offer a fixed return at a relatively low risk. The interest rate of a T-bill is determined by the market, and it is typically higher than the interest rate of a money market fund. T-bills are attractive to investors because they are issued and backed by the U.S. government, and they can be used to diversify a portfolio.
CDs are similar to T-bills in that they offer a fixed return at a relatively low risk. However, CDs have longer maturity terms, ranging from 6 months to 5 years, and they typically offer higher yields than T-bills. CDs can also be used to diversify a portfolio, but they are not as liquid as T-bills.