What's the difference between Treasury bills, notes, and bonds?

They're all debt issued by the U.S. government and differ mainly by how long they last. Treasury bills (T-bills) mature in one year or less and are sold at a discount – you buy below face value and collect the full amount at maturity, with the gap acting as your interest. Treasury notes run 2 to 10 years and pay interest every six months. Treasury bonds stretch 20 to 30 years and also pay semiannual interest. All are backed by the full faith and credit of the U.S. government, making them among the safest investments available, and the interest is exempt from state and local income tax. You can buy them directly at TreasuryDirect.gov or through a brokerage, often inside a bond fund. Longer maturities pay more but swing more in price when interest rates move.