A more thorough explanation:

T-BILL

A T-Bill, also known as a Treasury Bill, is a short-term debt security issued by the United States government. It is a way for the government to borrow money from the public to finance its operations and pay off its debts. T-Bills are considered to be one of the safest investments because they are backed by the full faith and credit of the U.S. government.

For example, if you buy a T-Bill with a face value of $1,000 and a maturity date of 90 days, you will pay less than $1,000 for it. When the T-Bill matures, the government will pay you the full face value of $1,000. The difference between the purchase price and the face value is the interest earned on the investment.

Another example is if a bank needs to borrow money to meet its reserve requirements, it can buy T-Bills from the government. The bank can then use the T-Bills as collateral to borrow money from the Federal Reserve at a lower interest rate.

The examples illustrate how T-Bills work. When you buy a T-Bill, you are essentially lending money to the government. The government pays you back the full amount when the T-Bill matures, plus interest. Banks can also use T-Bills as collateral to borrow money from the Federal Reserve. This makes T-Bills a safe and reliable investment option for individuals and institutions alike.