Treasury bills example

While the Federal Reserve was raising rates, yields in the Treasury market rose notably. Now that the Fed has begun to cut rates, those higher yields are a thing of the past. In particular, short-term investments, such as Treasury bills, have seen yields dip, and with more rate cuts possible in the future, these yields should drop further.

Treasury bills, also known as T-bills, have maturity dates of one year or less and are “one of the safest products there is,” said Ken Tumin, founder of DepositAccounts.

They are a short-term debt obligation backed by the U.S. Treasury Department, which is what makes them such a safe bet.

Lately, Treasury bill yields have been hovering above 4%, making them an attractive option even compared to, say, the best 1-year CDs.

Buying T-bills can sound complicated in theory, but it's worth understanding how they work and how to get them to reap the secure rewards.