What are Treasury Bills in India - Meaning, Status, Interest Rates, & How to Buy

2 min read | Updated on October 03, 2025, 18:24 IST

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Every investor invests according to their risk appetite. Investors with high risk appetite invest in equities, other risk-averse investors invest in corporate bonds, and people who wish for a return with minimum or no risk opt for Treasury bills, also known as T-Bills.

In this blog, you will understand what T-Bills are, their features, types and how you can invest in T-Bills.

What are T-Bills? Who issues treasury bills and why?

T-Bills, or treasury bills, are money market instruments issued by the government via the RBI (Reserve Bank of India) to meet their short-term fiscal budget needs. The government issues T-bills to fulfil its short-term obligations and in exchange, provides a decent return to the investor. RBI holds auctions on behalf of the central government where investors buy T-Bills at a discounted price.

Features of T-Bills

Zero-coupon rate

T-bills are issued at a zero-coupon rate, meaning interest will not be paid on these bills. Instead, the return for the investors is the difference between the purchase price and the face value of the T-Bills.

Minimum investment

As per RBI regulations, an investor has to make a minimum investment of ₹25,000 to purchase short-term treasury bills. If you wish to invest more, then further investments have to be in multiples of ₹25,000.

Tradeable

You can easily trade T-bills within the maturity period in the secondary markets like NSE or on the ‘Retail Direct’ platform.

Yield Rate on T-Bills

Since T-bills are issued at a zero-coupon rate, investors gain a return at maturity, which is the difference between the purchase price and the face value.

For example, RBI offers T-Bill at a discounted rate of ₹97, whereas its face value is ₹100 for a period of 91 days. So, the difference between the face value and purchase price is the return an investor gets on the maturity date.

But how can you know if the return on T-Bills is worth investing in?

You need to check the yield rate on T-Bills and see if it’s more than India's current inflation rate. The goal of investing is to maintain the value of money and capital appreciation, so opt for T-bills that fulfill at least one of these.

Here’s how you can find out the yield rate of T-Bills:

Yield Rate Formula: Y= [(100-P/P)] x 365/D x 100

Where, Y = Yield in percentage P = Purchase price of the T-Bill D = Maturity Days

Y= [(100-97/97) x 365/91 x 100

The yield rate on this T-Bill is 12.4%, and India’s average inflation rate is around 5%. Since the return on maturity beats the inflation rate, you can invest in it.

Types of treasury bills

Treasury Bills are categorized according to their maturity term. The following are the types of T-Bills:

14 days treasury bills
91 days treasury bills
182 days treasury bills
364 days treasury bills

Advantages of treasury bills

Risk Free

T-Bills carry low risk as they are issued by the government of India and there is a low risk of default on these bills.

Non-competitive bidding

RBI hosts the auctions for the T-Bills on behalf of the central government. These auctions are non-competitive, meaning T-bills aren’t granted to those who bid the highest on them. Anyone willing to buy T-bills can do so by buying them on the primary market or directly from the RBI’s ‘Retail Direct’ platform.

Liquidity

T-Bill has moderate liquidity, as you can freely trade Treasury bills on the RBI’s ‘Retail Direct’ platform and in the secondary market.

Limitations of treasury bills

Treasury bills carry low risk and hence provide a lower return to their investors. The yield rate on T-Bill will remain consistent despite economic conditions and business cycles, this could be a bane or boon depending on how you view it. Equities provide a higher return due to the high risks involved and give returns as per economic conditions. In the case of T-bills, even during an economic downturn, you will receive the promised value on maturity.

How to buy treasury bills

There are two ways you can purchase T-Bills:

RBI ‘Retail Direct’ platform

You can purchase G-securities like T-bills on the RBI’s online ‘Retail Direct’ platform.

Through a bank or brokerage firm

You can purchase T-Bills by creating a demat account with a depository participant, such as a bank or a trusted brokerage firm like Upstox.

NSE

NSE trading members can place their orders through NSE or through the NSE goBID web platform.

If you wish to start your investing journey, sign up on UpLearn by Upstox to make informed investment decisions.

About Author

Mariyam Sara

Sub-Editor

holds an MBA in Finance and is a true Finance Fanatic. She writes extensively on all things finance whether it’s stock trading, personal finance, or insurance, chances are she’s covered it. When she’s not writing, she’s busy pursuing NISM certifications, experimenting with new baking recipes.