If you have ever wondered where to park money for 91 days and earn better than a savings account — with zero risk of default — Treasury Bills are the answer. They are one of the oldest and safest financial instruments in India, issued weekly by the Reserve Bank of India, yet most retail investors have never bought one.
This guide covers everything: what T-Bills are, how they work, what yields you can expect in 2026, how they compare to other short-term instruments, and a step-by-step guide to buying them online.
What are Treasury Bills (T-Bills)?
Treasury Bills — commonly called T-Bills — are short-term debt instruments issued by the Government of India through the Reserve Bank of India (RBI) to meet its short-term borrowing needs. They are a type of government security (G-Sec) with a maturity of less than one year.
Unlike bonds or fixed deposits, T-Bills do not pay any interest. Instead, they are issued at a discount to their face value and redeemed at full face value on maturity. The difference between the purchase price and the face value is your return.
For example: You buy a 91-day T-Bill at ₹98,200. At maturity, the government pays you ₹1,00,000. Your profit is ₹1,800 — earned in 91 days with zero credit risk.
Definition of a Treasury Bill
A Treasury Bill is a short-term, zero-coupon government security issued at a discount and redeemed at par (face value) on maturity. Key characteristics:
- Issued by the Government of India, managed by RBI
- Maximum maturity of 364 days — making them money market instruments
- No periodic interest payments — returns come entirely from the discount
- Sovereign credit rating — zero default risk
- Minimum investment of ₹10,000 (in multiples of ₹10,000)
Types of T-Bills in India
The Government of India currently issues three types of T-Bills based on maturity:
| Type | Maturity | Auction frequency | Best suited for |
|---|---|---|---|
| 91-day T-Bill | ~3 months | Weekly (every Wednesday) | Very short-term parking of funds |
| 182-day T-Bill | ~6 months | Every 2 weeks | Medium short-term goals |
| 364-day T-Bill | ~1 year | Every 2 weeks | Near 1-year investment horizon |
The 91-day T-Bill is the most actively traded and widely tracked. Its yield is often used as a benchmark for short-term interest rates in India.
How do T-Bills work? A step-by-step example
Let us walk through a complete example of a 91-day T-Bill investment:
| Step | Detail |
|---|---|
| Face value | ₹1,00,000 |
| Purchase price (at auction) | ₹98,200 (issued at a discount) |
| Holding period | 91 days |
| Amount received at maturity | ₹1,00,000 (face value) |
| Profit | ₹1,800 |
| Annualised yield | (1,800 ÷ 98,200) × (365 ÷ 91) × 100 ≈ 7.35% |
T-Bill yields in India — what to expect in 2026
T-Bill yields move in line with RBI’s repo rate and overall liquidity conditions. As a rough guide for 2026:
| T-Bill type | Approximate yield (2026) |
|---|---|
| 91-day T-Bill | 6.40% – 6.70% |
| 182-day T-Bill | 6.50% – 6.80% |
| 364-day T-Bill | 6.60% – 6.90% |
These yields are significantly better than most savings accounts (2.5–4%) and comparable to short-term fixed deposits — but with sovereign safety that no bank deposit can match beyond the ₹5 lakh DICGC insurance limit.
T-Bills vs other short-term investments in India
| Instrument | Returns | Safety | Liquidity | Min. investment |
|---|---|---|---|---|
| Savings account | 2.5–4% | High | Instant | No minimum |
| FD (3 months) | 4.5–6% | High (DICGC up to ₹5L) | Penalty on early exit | ₹1,000+ |
| Liquid mutual fund | 6–7% | Moderate | T+1 day | ₹500+ |
| T-Bills | 6.4–6.9% | Sovereign (zero risk) | NDS-OM secondary market | ₹10,000 |
T-Bills win on safety — they are the only option here with a true sovereign guarantee, not just insurance up to a limit. They compare favourably on returns too, beating savings accounts and short FDs comfortably.
Who should invest in T-Bills?
T-Bills are ideal for:
- Investors with idle cash for 3–12 months who want better returns than a savings account
- Conservative investors who want zero credit risk — no corporate bond risk, no NBFC risk
- High-net-worth individuals with amounts above ₹5 lakh where DICGC bank insurance is insufficient
- Businesses and corporates managing short-term surplus funds
- Investors building a bond ladder — pairing T-Bills with SDLs and G-Secs across different maturities
How to invest in T-Bills online in India — step by step
Retail investors can now buy T-Bills directly through the RBI Direct platform — no broker, no demat account needed.
Tax treatment of T-Bills in India
Understanding tax is important before investing:
- The discount earned is treated as income, not capital gains — it is added to your total income and taxed as per your income tax slab rate.
- No TDS is deducted at source by RBI Direct — you receive the full face value at maturity, but you are responsible for declaring and paying the tax in your ITR.
- If sold before maturity on NDS-OM, any gain or loss is treated as capital gains.
For investors in the 30% tax slab, this means T-Bill post-tax returns are lower than the headline yield. Compare with alternatives like PPF or tax-free bonds if you are in the highest slab.
T-Bills vs SDL vs G-Secs — which to choose?
| T-Bills | SDL | G-Secs | |
|---|---|---|---|
| Issuer | Central government | State governments | Central government |
| Maturity | Up to 1 year | 5–40 years | 1–40 years |
| Returns | 6.4–6.9% | 7.1–7.6% | 6.8–7.1% |
| Interest payments | None (discount instrument) | Semi-annual coupon | Semi-annual coupon |
| Best for | Short-term parking | Long-term fixed income | Medium-long term |
| Credit risk | Sovereign (zero) | Near-sovereign | Sovereign (zero) |
Use T-Bills for short-term goals (under 1 year). Use SDLs and G-Secs for long-term fixed income allocation.
The bottom line
Treasury Bills are India’s safest short-term investment — sovereign-backed, RBI-managed, and now directly accessible to every retail investor through RBI Direct. They consistently beat savings accounts and short-term fixed deposits on returns, with a safety profile no bank can match for large amounts.
If you have idle money sitting in a savings account for more than 90 days, you owe it to yourself to explore T-Bills. The process takes less than 15 minutes to set up and the returns start working the moment your bid is allotted.
For long-term fixed income, also consider: State Development Loans (SDL) and Government Dated Securities (G-Secs).