The Key Difference Between Treasury Bills and Treasury Bonds

Treasury Bills vs Treasury Bonds
Feature	Treasury Bills (T-Bills)	Treasury Bonds (T-Bonds)
Definition	Short-term government debt securities issued at a discount, maturing within one year.	Long-term government debt securities with fixed interest paid periodically, maturity over 10 years.
Maturity Period	Typically 4, 13, 26, or 52 weeks (less than one year).	Typically 10 to 30 years.
Interest Payment	No periodic interest; sold at discount and redeemed at face value.	Fixed interest (coupon) paid semi-annually until maturity.
Investment Purpose	Used for short-term cash management and liquidity.	Used for long-term investment and income generation.
Risk Level	Very low risk; backed by government credit.	Very low risk; backed by government credit.
Price Volatility	Generally less volatile due to short maturity.	More price sensitive to interest rate changes due to long maturity.
Tax Treatment	Interest income is exempt from state and local taxes in some countries.	Interest income generally taxable at federal, state, and local levels.
Liquidity	Highly liquid and actively traded in money markets.	Highly liquid but less so compared to T-Bills.
Pricing	Sold at discount; no coupon payments.	Sold at or near face value; pays coupons.