Treasury Bills are money market instruments to finance the short term requirements of the Government of India. These are discounted securities and thus are issued at a discount to face value. The return to the investor is the difference between the maturity value and issue price.
Types of Treasury Bills
There are different types of Treasury bills based on the maturity period and utility of the issuance like, ad-hoc Treasury bills, 3 months, 6 months and 12months Treasury bills etc.
In India, at present, the Treasury Bills are issued for the following Tenors 91-days, 182-days and 364-days Treasury bills.
Minimum Amount of Bids
Bids for treasury bills are to be made for a minimum amount of Rs 25000/- only and in multiples thereof.
All entities registered in India like banks, financial institutions, Primary Dealers, firms, companies, corporate bodies, partnership firms, institutions, mutual funds, Foreign Institutional Investors, State Governments, Provident Funds, trusts, research organizations and even individuals are eligible to bid and purchase Treasury bills.
Benefits Of Investment In Treasury Bills
• No tax deducted at source
• Zero default risk being sovereign paper
• Highly liquid money market instrument
• Better returns especially in the short term
• Simplified settlement
• High degree of tradeability and active secondary market facilitates meeting unplanned fund requirements