Treasury Bills- A Good Tax Free Investment
by Treasury bills such as three month treasury bills and one year treasury bills are popular with investors who look for the best way to profit while paying the least amount of taxes.
What are Treasury Bills?
Treasury Bills are securities sold by the government. In the United States, treasury bills are sold by the U.S. Treasury Department. Treasury bills are also called T-bills.
The revenue which is generated from the sale of these securities is used to fund the expenses of the federal government.
Treasury bills are usually regarded as safe investments in most countries, because they are issued by governments. In the U.S., it is safer to purchase treasury bills from the Federal Reserve Bank. Treasury bills purchased at the Federal Reserve Bank will be registered in your name, offering you the full protection of the U.S. government’s guarantee.
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Treasury bills which are purchased at other locations, such as through brokerage firms, may be registered in the name of the brokerage firm, not in your name. Additionally, when treasury bills are purchased from a regional branch of the Federal Reserve Bank, no fees are charged.
Fees which are charged at brokerage firms are tax-deductible.
In many countries, treasury bills are a good tax-free investment. In the U.S., T-bills are exempt from federal taxes and they are also exempt from state taxes.
Treasury bills are sold at discount, which means that you get your interest at the start of the investment. For example, if you buy a T-bill for $200 at 10% discount, you will receive a cheque in the mail shortly after for the amount of the discount, which is $20. This $20 can be further invested. You don’t have to report the $20 for tax purposes, until the Treasury bill matures.
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Post CommentWizard Brown
On February 13, 2011 at 6:23 am
Very informative. This can help a lot of people. Thanks
Francois Hagnere
On February 13, 2011 at 6:27 am
Informative post. Thank you.
lillyrose
On February 13, 2011 at 6:29 am
I never knew this. Great detailed article.
nz2rdfox
On February 13, 2011 at 6:40 am
Good write-up about treasury bills..you know your money very well
jemialbert
On February 13, 2011 at 7:24 am
great article
SharifaMcFarlane
On February 13, 2011 at 7:37 am
You’re welcome Wizard Brown.
SharifaMcFarlane
On February 13, 2011 at 7:46 am
Hi Francois,
You\’re welcome.
john smither
On February 13, 2011 at 9:11 am
Interesting information on this investment.
LewSethics
On February 13, 2011 at 10:07 am
Good, another way to diversify my vast resources!
Guy Hogan
On February 13, 2011 at 10:24 am
T-Bills sound like a good investment to me.
Raj the Tora
On February 13, 2011 at 10:43 am
Very good investment and most importantly very secure too. Thanks for bringing this up Sharifa
gaby7
On February 13, 2011 at 11:12 am
You reminded me of my now fading knowledge on treasury bills! Thanks!
wonder
On February 13, 2011 at 12:10 pm
A good investment, well shared.
Jimmy Shilaho
On February 13, 2011 at 12:41 pm
Treasury bills are a good investment but in most countries, they require a large sum as the base minimum.
SharifaMcFarlane
On February 13, 2011 at 5:32 pm
Thanks Lilly.
SharifaMcFarlane
On February 13, 2011 at 5:33 pm
@ Nz
SharifaMcFarlane
On February 13, 2011 at 5:35 pm
Thanks Jemi.
SharifaMcFarlane
On February 13, 2011 at 5:37 pm
Thanks John.
SharifaMcFarlane
On February 13, 2011 at 5:39 pm
Lew, I’ll gladly take a commission for the information.
SharifaMcFarlane
On February 13, 2011 at 5:43 pm
Hi Guy. They are.
SharifaMcFarlane
On February 13, 2011 at 5:46 pm
Thanks for stressing that Raj. The security aspect is one of the best features of this type of investment.
SharifaMcFarlane
On February 13, 2011 at 5:49 pm
Gaby, you are welcome.
SharifaMcFarlane
On February 13, 2011 at 5:53 pm
Thanks Wonder.
SharifaMcFarlane
On February 13, 2011 at 6:00 pm
That’s so Jimmy. It’s an option for persons who may come into a large sum of money through redundancy, or other changes. Persons may sometimes sell a larger house after children are grown and move to a smaller one. The sale can produce funds that can be used for this.
LCM Linda
On February 13, 2011 at 10:21 pm
Treasury bills is new to me. Learn new things. Thanks!
Michal Dorcak
On February 13, 2011 at 11:45 pm
Interesting. Seems like a waste of money for the government though.
CHIPMUNK
On February 14, 2011 at 3:54 am
great work
SharifaMcFarlane
On February 14, 2011 at 4:01 am
Thanks Linda
SharifaMcFarlane
On February 14, 2011 at 4:20 am
Michal, a government issues treasury bills in order to get access to more money, to fulfill its responsibilities.
Sharif Ishnin
On February 14, 2011 at 11:10 pm
Very informative post. You are very good in this kind of stuff. I bet its called something else in my country.
culprit pontiff
On February 18, 2011 at 3:17 pm
In Philippines,Treasury bills are offered anually, but sad thing, fund manager(banks) choose investors with high capital…why..because its easier to manage few clients rather than plenty clients with minumum investment..
that\’s why I prefer Mutual Funds as my Initial Wealth Accumulation vehicle..though it has higher risk..