Is it safe to invest in Treasury bills? What risks are involved?

When looking for the best investment, one of the most interesting options for investors is public debt. Investing in public debt is an option available for both institutional and individual investors and, although it has its advantages, it also has some disadvantages to consider. Therefore, among these options, Treasury bills are included.

Treasury bills have been one of the most popular investments among conservative profiles for decades. In fact, this is not simply a coincidence, although many might think it is a boom. This financial product, which is issued by the Spanish State, is presented as a low-risk option with a relatively simple operation. However, does this mean it is risk-free? Are they still a good alternative considering the current economic context?

To help you fully understand what Treasury bills are, as well as their advantages and disadvantages, we will explain everything about them in detail, including how they can fit into your financial strategy.

What are Treasury bills and how do they work?

Treasury bills are short-term debt instruments issued by the Spanish Treasury. Their purpose is to finance the State’s immediate needs, with typical maturities ranging between 3, 6, 9, and 12 months.

It should be noted that Treasury bills are issued at a discount. What does this mean? That the investor pays today an amount less than the nominal value and, at maturity, receives 100% of the nominal value. For example: if you purchase a bill for 970 euros, at maturity you would recover 1000 euros according to its nominal value.

It is important to highlight that, as emphasized on the official Spanish Treasury website, this is a product that does not offer periodic interest payments. Therefore, investors in this type of public debt will obtain all their returns from the difference between the purchase price and the nominal value.

Why are they considered safe investments?

It is common to hear that Treasury bills offer great security. But is this really the case? The perceived safety of Treasury bills is based on their backing by the Spanish State. Does this have any real effect? In this case, default is considered extremely unlikely in developed economies such as Spain, which belongs to the eurozone.

Another reason they are considered safe is that they are short-term investments. This reduces exposure to interest rate fluctuations and political instability.

For these reasons, Treasury bills have traditionally been regarded as one of the safest ways to preserve capital. However, does this mean that such investments are free of risk? Absolutely not.

What risks do Treasury bills actually have?

Although the risk is low, this does not mean that these investments are risk-free. It is important to remember that every investment, no matter how conservative, carries some latent threats.

• Inflation risk – One of the most overlooked risks by investors, which is a significant mistake, is inflation. If the annual CPI exceeds the bill’s yield, the investor loses real purchasing power. An example is the year 2022, when bills barely offered returns close to 1%, while inflation in Spain closed near 5.7%.


• Reinvestment risk – At maturity, the investor may face lower interest rates if they decide to reinvest. This can progressively erode the overall return on capital.


• Market risk – The investor might decide to sell the bill before maturity. In this case, they may suffer losses if interest rates rise during that period, as older bills become less attractive.


• Country risk – This is the least likely risk, although in exceptional situations no country is completely exempt from debt crises.

How can Treasury bills be purchased?

1. Create an account with a financial institution that offers Treasury bills – To proceed with buying Treasury bills, it is important to have an account with a financial institution, whether a bank or brokerage firm. Important! Remember that not all financial institutions offer Treasury bills.


2. Choose the type of Treasury bill you want to buy – Treasury bills are issued with different maturities and interest rates. Depending on your investment goals, choose the bill that best suits your needs.


3. Place your purchase order – Once you have decided the amount you want to invest, place your purchase order. Remember to specify the maturity and the type of Treasury bill you want to buy.


4. Wait for the auction – Treasury bills are sold in public auctions held periodically. Therefore, you must wait for the corresponding auction to take place.


5. Try to hold Treasury bills until maturity – Treasury bills are short-term instruments, so you should keep them in your account until they mature. Once matured, you will receive the invested capital plus the corresponding interest.

Treasury bills vs safe alternatives to grow your money

When comparing Treasury bills with other low-risk products such as bank deposits or crowdfunding platforms like Inversa, we see that the range of options has expanded. This is of great interest to investors.

While Treasury bills offer yields close to 3% annually (situation as of April 2025 according to the Public Treasury), short-term crowdlending to selected companies can exceed 6% net annual returns, with equal or even shorter investment periods.

However, it should be noted that crowdlending does not have State backing, unlike Treasury bills. Nevertheless, if well diversified and with proper solvency analysis, it can serve as a complementary tool for conservative profiles seeking slightly higher returns without exposing themselves to high-risk products.

Keys to investing in Treasury bills consciously

Before investing in Treasury bills, consider:

• Real risk profile – Are you willing to accept inflation risk?


• Your time horizon – The shorter it is, the more sense this product makes.


• Liquidity objectives – Treasury bills are easily traded on the secondary market, but not always under favorable conditions.

And remember: combining Treasury bills with other options like Inversa can help mitigate purchasing power loss risk and improve diversification. You can consult more diversification strategies in our article about short-term investments.