What are T-bills?

Treasury Bills, commonly known as T-bills, are short-term money market instruments issued by the Government of India to meet short-term financial requirements. These are considered secure investment options as they are backed by the government.

Tenors of T-bills

Currently, T-bills are issued in three different maturities:

• 91-day T-bills
• 182-day T-bills
• 364-day T-bills

Since they are short-term instruments, they help the government manage temporary liquidity mismatches while offering investors a low-risk way to park their funds.

How Do Treasury Bills Work?

T-bills are zero-coupon securities, meaning they do not pay periodic interest like traditional bonds. Instead, they are issued at a discounted price and redeemed at their full face value upon maturity.

Example:

• Suppose you invest in a 91-day T-Bill that has a face value of ₹100.
• It may be issued at a discounted price of ₹98.20.
• Upon maturity (91 days later), you will receive ₹100.
• You will get the benefit of ₹1.80 (₹100 – ₹98.20) due to the difference between the issue price and the maturity (face) value.

Why Are T-bills a Good Investment Option?

Safe and Secure: Ideal for risk-averse investors, T-bills offer a safe way to preserve capital and avoid stock market volatility.

Pledge T-bills: Pledge your T-bills as margins through the depository participant.

Highly Liquid: T-bills can be easily bought and sold in the secondary market.

Investors can exit their investment before maturity if needed.

Short-Term Investment: These may be ideal for those looking for low-risk, short-term investment options.

Useful for Diversification: A good addition to a balanced portfolio for risk management and liquidity. Suitable for conservative investors looking for capital preservation.

Accessibility and Transparency: The RBI facilitates easy access for individual investors through a clear, non-competitive bidding process via banks, with upfront details on rates and values.

How to Invest in T-bills Through Share India

To invest in T-bills through Share India, refer here.