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Treasury bills, notes and bonds are all marketable securities sold by the U.S. government to pay off debts and to raise cash. The differences between them involve the interest they pay and the length of time each is held.

T-bills are usually issued with a term of a year or less. They pay no interest before maturity, and instead, are sold at a discount from their face value. The holder receives the difference between the purchase price and the face price at maturity, or the price paid if it’s sold prior to maturity.

Treasury notes and bonds have a stated interest that’s paid semi-annually until maturity. Notes are issued in 2-, 3-, 5- and 10-year terms. Bonds have terms that are longer than 10 years.

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