Why are T-bills considered zero-risk investments?

T-bills are considered zero-risk investments in India for the following reasons:

Issued by the Government & RBI: T-bills are backed by the Government of India and issued by the Reserve Bank of India (RBI), ensuring zero credit risk.

Short-Term Maturity: T-bills are available for the duration of 91, 182, and 364 days.

Such short duration reduces exposure to market fluctuations and economic risks.

No Interest Rate Sensitivity: T-bills do not pay periodic interest. Instead, they are sold at a discount and redeemed at face value, making them less affected by interest rate changes.

High Liquidity: T-bills are actively traded in the money market. They can be easily bought or sold before maturity if needed.

Price Difference: If held till maturity, investors get to benefit from the difference between purchase price and face value. No risk of default as the repayment is ensured by the government.

Due to the factors mentioned above, T-bills are considered one of the safe investment options for investors. If you’re looking to invest in T-bills through Share India, you can check out the form here: T-bill Form.