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Treasury Bills

Updated on March 6, 2023

Treasury bills, also called T-bills are ‘zero-coupon’ short-term debt instruments issued by the Government of India, with a maximum tenure of 364 days. These are used by the government for borrowing funds and are issued at a discount to the Face value. As they are redeemed at their nominal value, the difference becomes an investor’s profit.

What are the benefits of Treasury Bills?

Treasury Bills have gained popularity amongst retail investors for their benefits like:
1. They are good for parking funds for the short term, upto one year
2. These are very low risk investments as T-Bills are issued by the Government of India and thus have almost zero maturity risk
3. Treasury bills can be sold in the secondary market

How To Buy T-Bills?

Retail investors can buy T-Bills by:
a) opening a ‘Retail Direct Scheme Account’ with the Reserve Bank of India (RBI) or
b) directly from the stock exchanges