Treasury bill guide: How T-bills work in India

Treasury bills are short-term Government of India securities. At an auction, the government raises money by selling bills at a discount to their face value. At maturity, the holder receives the face value.

How a bill earns a return

For illustration, a bill bought at ₹98.50 per ₹100 of face value pays ₹100 at maturity. The ₹1.50 difference is the gross gain per ₹100 of face value. A quoted annualised yield uses both that discount and the number of days to maturity.

What to compare

Check the settlement and maturity dates, the price, and whether you may need to sell before maturity. A sale before maturity depends on the market price at the time. RBI regularly publishes cut-off yields for 91-day, 182-day and 364-day bills. See the 11 November auction figures for a worked comparison across maturities.

Official information is available through RBI Retail Direct.