If you are looking for a safe, readily accessible place to stash some money, you could do a lot worse than Unites States Treasury bills. Both the principal and interest on T-bills are backed by the full faith and credit of the federal government, they can be readily sold in the secondary market and it doesn't take much money to buy them.
U.S. savings bonds still require the lowest minimum investment of all Treasury securities, with an entry level investment of $25. Other types of government securities, including Treasury bills, notes and bonds, aren't far behind. Starting April 7, 2008, the U.S. Treasury has sold them in increments of $100 with a minimum purchase of $100 face amounts.
U.S. Treasury notes and bonds are sold at their face amount and make regular interest payments to the holder every six months. Once the security matures -- it takes from two to 30 years -- you can redeem the note or bond for its face value. Treasury bills behave a bit differently. You buy them at a discount to their face value, then collect the T-bill's full face value when it matures. The difference between the discounted purchase price and the T-bill's face value is interest.
Since Treasury bills are sold at a discount to their face value, you might not need the full $100 to buy one. For example, a 52-week T-bill might be auctioned at $98.50. You would only pay the discounted price of $98.50, and the Treasury would redeem the bill for $100 upon maturity.
Individual investors can purchase U.S. Treasury securities, including T-bills, directly from the government through the Treasury Department's website, TreasuryDirect.gov. You must set up an account through the TreasuryDirect website prior to making your purchases. Alternately, you can buy Treasury bills through your investments broker or banker. These organizations have their own rules regarding minimum purchases that might be different than those imposed by the Treasury Department, and they might charge a commission or transaction fee for their services.
Mike Parker is a full-time writer, publisher and independent businessman. His background includes a career as an investments broker with such NYSE member firms as Edward Jones & Company, AG Edwards & Sons and Dean Witter. He helped launch DiscoverCard as one of the company's first merchant sales reps.