In US Fixed Income markets, a Bill is an instrument that matures in less than one year.

Another distinguishing characteristic of a bill is that fact that it is sold at a discount to it's face value. Because of this, bills are known as discount instruments. A bill, although it pays interest, does so in a single payment received at the maturity of the instrument.

For example, one might purchase a US Government issued 91 day T-Bill for perhaps $980.00, and receive $1,000 at maturity (i.e., 91 days later). This illustrates the concept of a discount instrument.

See also bond and note.