What is a Treasury Bill (T-Bill) in India?

A Treasury Bill (T-Bill) is a short-term government debt instrument issued by the Government of India through the Reserve Bank of India. T-Bills are zero-coupon instruments — they pay no periodic interest. Instead, they are issued at a discount to their face value, and investors receive the full face value at maturity. Available tenures: 91 days, 182 days, and 364 days. Minimum investment: ₹10,000.

How is T-Bill return calculated?

T-Bill return uses the discount formula: Issue Price = Face Value × [1 − (Discount Yield% / 100 × Days / 365)]. Your gain = Face Value − Issue Price. Annualised Return = (Gain / Issue Price) × (365 / Days) × 100. Example: 91-day T-Bill at 6.70% on ₹10,00,000 face value → Issue Price ≈ ₹9,83,290, Gain = ₹16,710, Annualised Return ≈ 6.81% p.a.

What is the minimum investment in a Treasury Bill?

The minimum T-Bill investment is ₹10,000 (one lot = 100 units × ₹100 face value). All investments must be in multiples of ₹10,000. There is no maximum limit for retail non-competitive bids through RBI Retail Direct.

How are T-Bill gains taxed in India?

T-Bill gains (face value minus issue price) are Short-Term Capital Gains (STCG) taxable at your income slab rate (5%, 20%, or 30%). No TDS is deducted via RBI Retail Direct. You must self-declare the capital gain in your ITR. At 30% slab, a 6.81% pre-tax annualised return becomes approximately 4.77% post-tax.

T-Bill vs Fixed Deposit — which is better?

For amounts above ₹5 lakh: T-Bills are safer (sovereign guarantee vs DICGC ₹5 lakh limit). Yields are comparable. No TDS via RBI Retail Direct. For amounts below ₹5 lakh: FDs may be more convenient. Tax treatment is the same (slab rate). The key difference is credit risk: T-Bills have zero credit risk. High-slab investors may prefer arbitrage funds for better post-tax returns.

What is the current T-Bill interest rate in 2026?

As of June 2026, RBI auction cut-off yields are approximately: 91-Day: ~6.70% p.a., 182-Day: ~6.75% p.a., 364-Day: ~6.85% p.a. These change at each weekly Wednesday auction based on market conditions and RBI monetary policy.

How to buy Treasury Bills in India?

Method 1 (Recommended): Open a free account at retaildirect.rbi.org.in and submit a non-competitive bid. Method 2: Through brokers (Zerodha, HDFC Securities, ICICI Direct) via NSE goBID — T-Bills credited to your existing demat account. Method 3: Indirectly through liquid funds or overnight mutual funds.

What is T-Bill laddering?

T-Bill laddering splits your investment across 91-day, 182-day, and 364-day T-Bills simultaneously. A portion matures every 91 days, providing quarterly liquidity while earning slightly higher yields on the longer-duration portions. Use the Ladder mode in this calculator to model your exact split.

What is the difference between T-Bill discount yield and annualised return?

The discount yield is used to price the T-Bill at auction. The annualised return (coupon-equivalent yield) is the actual percentage return scaled to a 365-day basis using: HPR × (365 / days). For a 91-day T-Bill at 6.70% discount yield, the annualised return is ~6.81% — slightly higher because the investor earns the gain on a lower issue price (not the full face value).

Can I sell a T-Bill before maturity?

Yes — T-Bills can be sold in the secondary market through NDS-OM before maturity. There is no penalty unlike bank FDs. However, the sale price depends on prevailing yields at the time of sale. For most retail investors, holding to maturity avoids secondary market complexity.

What is the effective annual yield (EAY) of a T-Bill?

EAY = (1 + HPR/100)^(365/days) − 1. This compounding-adjusted yield is slightly higher than the annualised return and represents what you would earn if you reinvested each T-Bill at the same rate throughout the year. For a 91-day T-Bill at 6.70%, EAY ≈ 6.94% p.a.

What is the FD equivalent yield of a T-Bill?

FD Equivalent Yield = Post-Tax T-Bill Annualised Return / (1 − Tax Rate). This tells you what pre-tax FD rate you would need to match the T-Bill's post-tax return. If this number is higher than what banks offer, T-Bills are the better choice for your tax situation.

Are T-Bills suitable for an emergency fund?

Yes, with caveats. 91-day T-Bills give sovereign safety and quarterly liquidity. However, they mature in fixed cycles — you cannot redeem instantly. For the core emergency fund (1–2 months expenses), keep money in a savings account or liquid fund. For the extended emergency buffer (3–6 months), 91-day T-Bills are excellent.

Do T-Bills beat inflation?

Not reliably. Current T-Bill yields (6.70–6.85%) are close to India's CPI inflation (~5–6%). After tax at 30% slab, the post-tax yield falls to ~4.7–4.8%, which is likely below current inflation. T-Bills are instruments of capital preservation, not inflation-beating growth.

What is RBI Retail Direct?

RBI Retail Direct (retaildirect.rbi.org.in) is the Government of India's platform for retail investors to buy government securities — including T-Bills — directly from the RBI. Account opening is free, brokerage is zero, and T-Bills are held in a Gilt Account directly with the RBI. Any Indian resident individual can open an account with PAN and Aadhaar.

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Government Securities Calculator

Treasury Bill (T-Bill) Calculator

Calculate your T-Bill issue price, discount gain, annualised yield, post-tax returns, and real returns after inflation. Model the T-Bill ladder strategy for quarterly liquidity. Supports 91-day, 182-day, and 364-day RBI T-Bills.

Sovereign Safety 6.70–6.85% yield (Jun 2026) RBI Retail Direct available

Investment Details

Choose duration

Number of lots

Total face value₹1,00,000

Discount yield (%)

Your Tax & Inflation

Your income tax rate (%)

Inflation rate (%)

Roll over for a full yearReinvest the proceeds when this T-Bill matures and repeat until 12 months is complete.

Your Result

You pay

₹98,317

Issue price (at discount)

You receive at maturity

₹1,00,000

After 91 days

Your profit

₹1,683

1.71% total return over 91 days

Returns Breakdown

Yearly return (pre-tax)

6.87%

Annualised

Yearly return (post-tax)

4.78%

At 30% slab

Real return (after inflation)

-0.68%

Purchasing power gain

FD rate to match this

9.81%

Pre-tax bank FD rate needed

Things you should know

T-Bills carry zero credit risk — they are direct obligations of the Government of India and the Reserve Bank of India guarantees repayment.

At 5.5% inflation, the real post-inflation return is negative (-0.68%). T-Bills preserve capital but may not grow purchasing power in high-inflation periods.

At the 30% slab, post-tax annualised return is 4.78%. If your FD offers less than 9.81% pre-tax, T-Bills are the better choice for equivalent after-tax income.

With a 91-day tenure, you face reinvestment risk — yields at the next auction may be higher or lower. Use the ladder strategy to stagger maturities and reduce this risk.

Reference Rates — June 2026

91-Day T-Bill ← selected6.7%

182-Day T-Bill6.75%

364-Day T-Bill6.85%

New to Treasury Bills?

Read our complete T-Bill guide — how the discount mechanism works, taxation, T-Bill laddering, and comparisons with FDs, FRSB, and debt mutual funds.

Read the Guide

Why T-Bills?

Why Invest in Treasury Bills?

T-Bills are the gold standard for short-term, capital-safe parking in India — used by banks, corporations, and now available to every Indian investor.

Sovereign Safety

T-Bills are direct obligations of the Government of India — zero credit risk. No ₹5 lakh insurance cap like bank FDs. Your entire investment is backed by the sovereign.

Competitive Yields

Current yields of 6.70–6.85% p.a. are competitive with most bank short-term FDs. Zero brokerage via RBI Retail Direct means the full yield reaches you.

Short Tenures

Available in 91-day, 182-day, and 364-day tenures. Match your investment horizon to your cash flow need — quarterly, semi-annual, or annual.

Ladder Strategy

Stagger across all three tenures to get quarterly liquidity while earning higher yields on longer portions. Reduces reinvestment risk.

No TDS

No TDS deducted at source via RBI Retail Direct. Capital gains self-declared in your ITR — better cash-flow management compared to bank FDs.

Transparent Pricing

RBI auction yields are publicly disclosed. No hidden charges. The discount mechanism means your return is locked in at purchase — zero uncertainty.

91-Day vs 182-Day vs 364-Day T-Bills

Tenure	Yield (Jun 2026)	Best For	Auction	Reinvest Risk
91-Day	~6.70%	Emergency fund, very short parking	Every Wed	Highest (4 reinvest cycles/yr)
182-Day	~6.75%	Semi-annual goals, bridging liquidity	Alternate Wed	Moderate (2 cycles/yr)
364-Day	~6.85%	Annual goals, rate-cut protection	Alternate Wed	Lowest (1 cycle/yr)

How T-Bill Returns Are Calculated

Issue Price Formula

Issue Price = FV × [1 − (Y/100 × D/365)]

FV = Face Value (₹10,000 per lot)

Y = Discount Yield % p.a.

D = Days (91, 182, or 364)

Annualised Return Formula

HPR = (FV − Issue Price) / Issue Price × 100

Annualised = HPR × (365 / D)

HPR = Holding Period Return

Always slightly higher than Y

Effective Annual Yield

EAY = (1 + HPR/100)^(365/D) − 1

Accounts for compounding

Use to compare with FD EAR

Inflation-Adjusted (Real) Return

Real = (1 + Nominal) / (1 + Inflation) − 1

Fisher Equation

Shows true purchasing power gain

Tax note: T-Bill gains are Short-Term Capital Gains (STCG) taxed at your income slab rate. At 30% slab, a 6.81% annualised pre-tax return becomes ~4.77% post-tax. Compare this post-tax yield against bank FD post-tax interest to make the right decision.

Worked Example — ₹1,00,000 Investment

You want to park ₹1,00,000 in a 91-day T-Bill at a 6.70% discount yield. Here is exactly what happens:

Step	Calculation	Result
Face Value	10 lots × ₹10,000	₹1,00,000
Issue Price (Pay Today)	1,00,000 × [1 − (6.70/100 × 91/365)]	≈ ₹98,329
Gain at Maturity	₹1,00,000 − ₹98,329	₹1,671
HPR	1,671 / 98,329 × 100	1.699%
Annualised Return	1.699% × (365 / 91)	6.81% p.a.
Post-Tax (30% slab)	6.81% × (1 − 0.30)	4.77% p.a.
FD Equivalent Yield	4.77% / (1 − 0.30)	~6.81% pre-tax FD

This means: if your bank FD offers less than 6.81% for 91 days, the T-Bill provides a better or equal post-tax outcome. At 30% slab, your ₹1,671 gain → ₹1,170 post-tax. Use the calculator above to model your exact scenario.

FAQ

Frequently Asked Questions

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