what are the characteristics of the u s treasury bills t bills 
treasury bills t bills are assumed to have zero default risk because they represent and are backed by the good faith of the u s government they are sold at a discount from par at a weekly auction in a competitive bidding process they don t pay traditional interest payments like their cousins the treasury notes and treasury bonds and are sold in various maturities in denominations of 1 000 finally they can be purchased by individuals directly from the government the bottom linethe risk free rate of return is the theoretical rate of return that an investor would expect on an investment with zero risk any investment with a risk level greater than zero must offer a higher rate of return in practice this rate of return doesn t truly exist every investment carries some amount of risk even if that risk is small the three month u s treasury bill is often used as a proxy for a risk free rate of return in u s markets because the risk of default by the government is low other countries and economic zones may use different proxies such as euros or swiss francs 