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The safest short-term investment in India
Treasury Bills (T-Bills) are short-term money market instruments issued by the Reserve Bank of India on behalf of the Government of India. They are issued at a discount to face value and redeemed at par on maturity—meaning you don't receive any interest payments, but earn returns through the discount.
For example, if you buy a 91-day T-Bill at ₹9,830, you'll receive ₹10,000 on maturity. The ₹170 difference is your return. This works out to approximately 6.9% annualized yield.
T-Bills are the safest short-term investment available in India, backed by the sovereign guarantee of the Government of India. They're ideal for parking surplus funds for periods up to one year.
Shortest tenure T-Bill for very short-term parking of funds.
Medium-short tenure for half-year investment horizon.
Longest T-Bill tenure, best yield among T-Bills.
Formula: Yield = (Face Value - Price) / Price × (365 / Days) × 100
Backed by Government of India. Zero default risk—the safest place to park short-term funds.
Active secondary market allows you to sell before maturity if needed. Settlement in T+1.
Choose from 91, 182, or 364-day maturities based on when you need the money.
Yields of 6.5-7% significantly beat savings account rates of 2.5-4%.
No tax deducted at source. You self-report the discount income in your ITR.
RBI conducts T-Bill auctions every Wednesday, providing regular investment opportunities.
Open a free RBI Retail Direct account. Place non-competitive bids in weekly T-Bill auctions. Zero charges for buying and holding.
Buy T-Bills on NSE/BSE through your demat account. Available in secondary market after auction allotment.
Liquid mutual funds invest significantly in T-Bills. Get indirect T-Bill exposure with instant redemption facility.
| Aspect | Details |
|---|---|
Tax Treatment | Income from Other Sources |
Tax Rate | As per your income tax slab |
TDS | No TDS deducted |
Reporting | Self-report discount in ITR |
| Aspect | Details |
|---|---|
Holding Period for LTCG | > 12 months (Listed) |
LTCG Tax Rate | 12.5% |
STCG Tax Rate | As per slab rate |
Note | T-Bills rarely held >12 months |
Note: Since T-Bills have maximum 364-day tenure, if held to maturity, the discount is always taxed as short-term income at slab rates. The LTCG benefit only applies if you buy from secondary market and hold the cumulative period >12 months.
When your T-Bill matures, prevailing rates may be lower. You'd need to reinvest at lower yields.
If inflation exceeds T-Bill yields, your real (inflation-adjusted) returns become negative.
Lower returns compared to longer-dated bonds or corporate bonds. You trade returns for safety.
| Feature | Treasury Bills | Bank FD |
|---|---|---|
| Safety | Sovereign (100%) | DICGC insured (up to ₹5L) |
| Current Yield (1 year) | ~6.8-7.0% | ~6.5-7.0% |
| TDS | No TDS | 10% TDS on interest |
| Liquidity | Sellable in secondary market | Premature withdrawal penalty |
| Min Investment | ₹10,000 | ₹1,000-5,000 |
| Interest Payment | Discount (at maturity) | Periodic or cumulative |
Common questions about Treasury Bills
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