T-Bills, also called zero-coupon securities, are issued by the RBI every week and come with a maturity period of 91 days, 182 days and 364 days.
If you are looking for a secure investment with a stable income from your savings, you might want to invest in a fixed deposit (FD) scheme. According to reports, people invest around Rs 60 trillion every year, of which 15% is in FD and gold.
If you are investing in FDs, you can also choose an alternative option that provides safety and security and the scheme is Treasury bills (T-Bills). Fixed deposits are a financial scheme that is provided by the banks in which you can deposit money for some time and gain interest until the time it matures. On the other hand, Treasury Bills are issued by the Government of India and it is a money market instrument issued as a promissory note to repay in the future.
T-Bills (also called zero-coupon securities) are issued by the Reserve Bank of India (RBI) every week. They come with a maturity period of 91 days, 182 days and 364 days. T-Bills for 3 months and 12 months offer 6.7% interest rates against FD rates of 4.5 to 6%.
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T-Bills are risk-free and secure, as they are issued by the government and are issued at a discounted rate. Once matured, these bills will automatically be debited from your demat account, and the face value will be credited to your bank account from the demat account.
The profit gained from T-Bills is considered a short-term capital gain, and income tax is applicable according to the slab of the investor. FDs often have minimum investment parameters and can be opened with only Rs 1,000 but investing in T-Bills require at least Rs 25,000 and they are issued only in the multiples of Rs 25,000. Though T-Bills have a set interest rate that remains constant, FD’s interest rates might change depending on the market state and the financial institution issuing the deposit.
Treasury Bills can be easily converted into cash and can be sold in the secondary market before maturity. FDs have a fixed period and have to pay a fine if the money is withdrawn before maturity.
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T-Bills are the debts of the government issued as bonds by the RBI that can be bought by investors. Initially, only banks and financial institutions were allowed to invest in T-Bills but now it is available to retail investors.
