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> They are literally paying the government for the reassurance that they will get 99.98% of their money back in 3 months. Why not just hold on to the money, an

• roymurdock 11y ago
  We're not talking about individual investors, we're talking about institutional investors + banks with billions/trillions under management. They can't just sock that much money away in another bank. They have risk profiles that they need to construct. Some of these profiles undoubtedly call for low-risk, short-term assets. So they buy T-bills (even at a slight loss) to complete their portfolios which probably also contain a bunch of other assets.
• s73v3r 11y ago
  Where would you put it? Not a bank, because that's even riskier than treasury bills, cause you have the (admittedly small if you're going to a large bank) risk of it failing. Hold onto it in cash? Now you've got the expense of keeping it somewhere, and the risk that it could get stolen, burnt, misplaced, etc.