A "Treasury bill" or "T-bill" is a short-term debt obligation backed by the U.S. government. T-bills are sold in denominations of $1,000 (up to a maximum of $5 million) and typically have maturities of four weeks, 13 weeks, or 26 weeks. T-bills do not pay a fixed interest payment. They are issued through a competitive bidding process at a discount from par (face value). It is the appreciation of the T-bill that provides a return to the holder. For example, a 13-week T-bill might be purchased for $9,800, with the U.S. government agreeing to pay $10,000 for the T-bill at the end of the 13-week period. This provides a $200 return to the holder. Additionally, T-bills are exempt from state and local taxes. T-bills may be purchased directly from the U.S. government at www.treasurydirect.gov.