Short-term Treasury bills - Is it a safe haven for investors?

Where is a Safe place for investors to put their cash?

Treasury bills are in demand as they are considered the safest short term financial asset for investors. Is this true? What do the facts show?Wall Street is feeling the pinch as stocks drop due to the bailout of banks needing to be rescued for immobilizing debt. The yield on the 3-month Treasury bill continues to fluctuate as the market changes.

Who issues Government Bonds?

Government bonds are issued by the U.S. Treasury Department through the Bureau of the Public Debt, referred to as Treasuries, there are 4 types of these securities.

• Treasury Bills
• Treasury Notes
• Treasury Bonds
• Treasury Inflation Protected Securities

All of the marketable Treasury securities are liquid and are heavily traded on the secondary market. The non-marketable securities (such as savings bonds) are issued to subscribers and cannot be transferred through market sales.

Non-Competitive bidding - what you should know

Treasury bills are issued through an auction bidding process, which occurs weekly, when starting out one may wants to put in a non-competitive bid which allows you to accept the interest rate decided at the auction. From this process your bid is guaranteed to be accepted with the full amount of your bill paid back to you. However you will not know what interest rate you will receive until the auction closes.

What about competitive bidding?

In competitive bidding allows you to determine the return rate you want to receive, most corporations use this form of bidding, the key is to not bid higher than the rate set by the auction. A competitive bid is an offer to the US Treasury to purchase treasury securities at a particular yield.

Where can I purchase T-Bills?

First you may want to try at your bankThen you could also use a Investment Brokeror your can open an account pnline at TreasuryDirect, when you purchase T-Bills online you can have funds withdrawn from and deposited directly to your bank account.