T-Bills are issued by the U.S. Department of Treasury generally at a discount from the face value of the bill, meaning the purchase price is less than the face value. For example, a $1,000 bill might cost the investor $950 to buy the T-Bill.
T-Bills come with a maturity date of just a few days or up to a maximum of 52 weeks. If the investor holds the bill until the maturity date, the investor is paid the face value of the bill they bought. If the face value amount is greater than the purchase price, the difference is the interest earned for the investor.
If investors choose to sell the T-Bill early, there could be a gain or loss depending on where bond prices are trading at the time of the sale. In other words, the sale price of the T-Bill could be lower than the original purchase price if sold prior to maturity.
Market conditions may affect the price and liquidity of T-Bills on the secondary market.