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Short-term U.S. government security with maturities ranging from one month to 26 weeks. Treasury bills are usually sold at auction on a discount basis with a yield equal to the difference between the purchase price and the maturity value. Because they are highly liquid (money not being tied up in them for long periods of time), their yield rate is normally lower than that of longer-term securities. Their prices do not usually fluctuate as much as those of other government securities but may be influenced by the purchase or sale of large quantities of bills by the central bank. First used extensively during World War I, treasury bills were initially regarded as an emergency source of revenue, but their flexibility and relatively low interest led to their adoption as a permanent element in the national debt. From 1970 to 1998 the minimum order for treasury bills was $10,000, after which it was reduced to $1,000. In 2001 the U.S. Treasury stopped offering treasury bills with maturities of 52 weeks.
This entry comes from Encyclopædia Britannica Concise. For the full entry on treasury bill, visit Britannica.com.
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