Treasury Bills (T-Bills)

Treasury bills which are generally known as T-bills are the money market instruments categorized under short-term debt instruments. T-bills are issued by the government of India in the form of a promissory note with the repayment guarantee on the mentioned date. Funds collected through treasury bills are typically for the central government to meet the short-term needs such as building necessary infrastructure- hospitals, roads, highways, etc.

Active T-bills

T-bills funds contribute to the economy of the country by minimizing the overall fiscal deficit. Because they are short-term debt tools, the maximum maturity tenure is 364 days for zero interest (coupon) rates. Treasury bills are issued at a discount rate to the individual and can be redeemed at the face value during the time of maturity. 

For an instance- 91 day T-bill with a face value of ₹100 can be issued to the individual at the discounted rate of ₹98.20. During the T-bill maturity, the individual will receive the complete face value of ₹100 thus the profit of ₹1.60 is gained.

Features & Advantages of T-Bills


  • Minimal investment required - An investor should note that a minimum investment of Rs 25,000 is needed for treasury bills. Investments can be made only in multiples of Rs 25,000.
  • Zero-coupon securities - T-bills provide no interest on the total investments. Treasury bill investor earns the capital gains instead. An individual can buy the bill at the discounted rate and earn the face value rate upon maturity.


  • No risk involved - T-bills are issued by RBI and are supported by the Government of India. It is a short-term debt instrument; therefore the maturity period is less than a year and is very well secured; hence no risk is involved. Investment in Treasury bills assures the complete security of the funds. Even during the economic crisis, the Central government has to pay the complete funds to the T-Bill investor.
  • Effortless liquidity - T-bills are issued to the investor as a short-term investment instrument with a maturity period of 364 days (highest for Treasury bills). During the time of crisis, T-bills as being the government security can be sold back to the secondary market which allows an investor to convert treasury bills funds into cash.

T-Bill Returns

Types of Treasury Bills:

Treasury bills are much liquid investments as investment can be done for shorter period. The types of T-Bills are available based on their maturity period:

  • 91 days T-Bill
  • 182 days T-Bill
  • 364 days T-Bill

The maturity period of the treasury bills mentioned above remains constant while the face value and discount rate vary during the regular intervals.

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T-Bills FAQs

T-Bills being the short-term investment instruments help the Government of India to raise the funds to meet the brief development projects such as building highways, hospitals, etc. This instrument generates substantial/ excess revenue annually. The goal to issue treasury bills to the investors is to reduce the fiscal deficit in the Indian economy and to regulate the liquidity during a given time. RBI issues the T-bill.

T-bills are considered one of the secured forms of investment in our country. This instrument is ideal for investors who have surplus funds and want to invest in the safe tool to enjoy substantial returns. Basically to invest in T-bills is for those individuals who like to maintain the fund holding into the government investment tools to minimize the risk on their total capitals. Also, it is favoured for portfolio diversification.

T- Bill Yield calculation:

The Treasury bill is calculated based on the following formula:


P= purchase price

D= days of maturity

No. of days for T-bill= [Actual number of maturity days/365]

Suppose- the 91 day T-bill is issued at the price of ₹99.1966, so the yield will be based on the above-given formula:

When the same issued T-bill is trading at the price of ₹99 after 41 days, the yield percentage will be:

Please note: the maturity days remaining for T-bill is 50 days.

T-bills are issued twice in a week- every Monday and Tuesday. The investor should have Demat Compulsory. The minimum application of Rs.10000/- and maximum of Rs. 20000/- .

You can apply through our web portal in Treasury bill section

Treasury Bills are 100% guaranteed by Government of India for return of Principal.

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