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I'm specifically looking to make short term investments in Treasury Bills or Floating Rate Notes (FRNs), which are new securities that began to be offered in January 2014.

How do each of these securities serve different investor needs? When should one be preferred over the other for an individual looking to safely park his money for up to a few months?

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Couple of considerations between the two-

Maturity Floating Rate Notes offered on TreasuryDirect have a two year maturity.
Treasury bills have a variety of maturities less than 1 year. (Common ones are 4 weeks, 13 weeks, or 26 weeks)

Rate The FRN rate is based off the 13 week T-Bill. Usually the longer maturity T-Bills will have higher rates. If an investor believes that rates will increase in the near future, he/she would want the rate to adjust more frequently (or hold shorter maturity).

Transaction costs The FRN is similar to buying consecutive 13 week T-Bills. An investor may want to examine which will cost them less.

Principal Value If you sell the FRN before maturity, the discount on the face value may fluctuate depending on the rate. If you buy T-bills and allow it to mature-- you have slightly more certainty over the exact amount you are getting. Not a large consideration due to the short term nature of these products.

In short both of them will serve short term needs and are extremely safe products. You can buy and sell them before maturity to meet your investment timeline.

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