Issued and guaranteed by the U.S. government, T-bills are auctioned with maturities of four weeks, three months, six months, or one year. They are sold at a minimum $1,000 face value and in $1,000 increments above that. T-bills offer an advantage over money-market funds and bank CDs in that their income is exempt from state and local taxes. In addition, T-bill yields are often higher than those of money-market funds.
