Bond VS Bill

Quantitative Finance Level 1

In Fixed Income, what is the difference between a bond and a bill?

Interest rate sensitivity Time to maturity Value of Principle The letters ond and ill Coupon Rate

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Calvin Lin by Calvin Lin

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1 solution

Calvin Lin Staff
Feb 10, 2015

A bill is a short term debt which matures in a year, while a bond is a long term debt which matures in several years.

Hence, the difference between them is the time to maturity.

2 Helpful 0 Interesting 0 Brilliant 0 Confused

According to the wiki, bills mature in 1 to 5 years, while bonds mature from 12 years on. In between are "notes".

Félix Pérez Haoñie - 1 year, 8 months ago

Technically though, is a 20-year bond issued 19.5 years ago (i.e., maturing in 0.5 year) already considered a bill? Isn't it still considered a bond?

JP Delavin - 6 years ago

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I think it's still considered a bond and it's indeed considered a long-term debt (it has been issued for 19.5 years, counted in the maturity). cmiiw

Hana Nabila - 5 years, 8 months ago

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