Treasury bill
A short-term loan to the US government, lasting 4 to 52 weeks. You buy it below face value and get the full face value at maturity.
Treasury bills are sold at auction on TreasuryDirect and through brokerages, starting at $100. The gap between what you pay and the face value you get back is your interest.
The interest is taxed by the federal government but not by states or cities. Each auction sets a new rate, so T-bill rates change week to week.
Example
A $10,000 26-week bill bought for $9,810 pays $10,000 at maturity, so you earn $10,000 − $9,810 = $190.