T-Bills (Treasury Bills)

POSTED BY Prasanth ON February 8, 2012 1:19 pm COMMENTS (2)

I would like to know more about T-bills, where to purchase, how to purchase etc. Are they tax free? From what I know minimum amount is 25,000 and in multiples. What is the minimum lock down period? And finally, do you think it is a better investment that short term FDs? 🙂

2 replies on this article “T-Bills (Treasury Bills)”

  1. ashal jauhari says:
    February 8, 2012 at 5:19 pm

    Dear Prasanth, If you want to invest in T-Bills, please opt Gilt funds of various AMCs. The retail market of T-bills is almost non existent as of now. Still if you are interested, please check with IDBI bank as it has started recently a special product for retain trading of T-bills.

    Thanks

    Ashal

    Reply
  2. BanyanFA says:
    February 8, 2012 at 2:54 pm

    Hi Prashanth,
    While I might not be able to tell you where to buy a Treasury Bill, but what I know of – the other name of a Treasury Bill is probably Government of India Bonds. While these are the safest form of investments available, their returns are not great – considering they are safe.

    Plus the Treasury bills prices fluctuate depending upon the ruling interest rate in the economy. Price of bonds are inversely proportionate to the interest rates fixed by RBI.

    I am not sure if they are that easily available as they are generally bought by corporates / HNIs – RBI performs auctions of these bills. Your easy and safe bet is by investing into Liquid Funds such as HDFC Cash Management Fund, Reliance Liquid Fund, etc. Liquid funds in turn invest their holdings into Treasury Bills / Good Quality short term debt.

    I am not a great fan of short term FDs and prefer to invest into Liquid funds if my investment outlook is less than 1 year.

    Regards
    BFA

    Reply

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