Sovereign Guarantee — No Principal Loss
No principal loss risk — sovereign guarantee (Government of India). Treasury Bill — 364 Days are issued by the Reserve Bank of India on behalf of the Government of India and carry the full faith and credit of the sovereign. Your principal is not subject to market, credit, or default risk at maturity — there is no scenario in which the principal amount can be lost. The intra-tenor risk band reflects potential mark-to-market volatility before maturity, not the redemption value you receive from the sovereign at the end of the tenor.
Risk rating on this instrument is 1 — Very Low on 14paisa.
Key Facts
What is a Treasury Bill?
A Treasury Bill (T-Bill) is a short-tenure government security issued by the Reserve Bank of India on behalf of the Government of India. T-Bills are zero-coupon instruments — there is no periodic interest payment. Instead, you buy at a discount to face value and at maturity RBI credits the full face value back to your bank or demat account. The difference between the discounted purchase price and the face-value redemption is your return. T-Bills occupy the lowest risk tier in 14paisa's classification — alongside the RBI Floating Rate Savings Bond and other Government Securities, T-Bills carry the full faith and credit of the sovereign, so your principal is not subject to any principal loss.
Tenures available — 91-day, 182-day, 364-day
RBI issues T-Bills in three standard tenures, all under one year: 91-day, 182-day, and 364-day. The 91-day T-Bill is the most-traded short-tenure bill and acts as the closest sovereign proxy for three-month cash; the 182-day sits in between; and the 364-day — the longest retail-primary issuance — is the canonical annual-tenure benchmark. All three are sold at weekly primary auctions conducted by RBI (the 91-day and 182-day on a regular weekly schedule; the 364-day on its own weekly window). An investor can also buy outstanding T-Bills on the secondary market through any demat-account broker on NSE/BSE. Issue calendars and auction cutoff times are published by RBI each week.
How discount pricing and face-value redemption work
The rate we display on 14paisa is the quoted discount yield — how the bill is normally advertised in RBI's weekly auction. Walk-through example for a 364-day T-Bill with face value of ₹25,000 bought at a discount yield of 6.95% p.a.: the discounted purchase price is roughly ₹24,520, and at maturity RBI credits the full ₹25,000 face value to your account — a gain of about ₹480 over one year. The "discount yield" and the actual "investment yield" (annualised on the price you paid) differ slightly — the realised return is a touch higher than the discount yield — but they sit in the same range. Redemption is automatic: RBI credits the face value to the investor's bank or demat account at maturity without any action required from you.
Sovereign guarantee — why the risk rating is "Very Low"
T-Bills carry the full sovereign guarantee of the Government of India. RBI cannot default on a redemption payment it owes on a Treasury Bill — at maturity the face value is paid in full, with no possibility of credit-event haircut, deferral, or restructuring. The only variable risk dimension is intra-tenor mark-to-market volatility if you choose to sell your T-Bill on the secondary market before maturity; market sentiment can move the secondary-market price, but the redemption value at maturity is locked. This is what earns T-Bills a "Very Low" risk rating on 14paisa — the same tier as the RBI Floating Rate Savings Bond and other central-government-issued instruments.
Minimum ticket and how to invest
The retail minimum investment for T-Bills is ₹25,000, and subsequent purchases are in multiples of ₹25,000. The two practical retail buying channels are: (a) RBI Retail Direct (rbiretaildirect.org.in) — direct primary-auction participation for retail investors with a demat account; and (b) Stock Exchange (NSE / designated exchanges) — secondary-market purchase or non-competitive bidding at participating brokers. RBI Retail Direct is the cleanest path for investors who want to participate in the primary auction directly; brokers on NSE expose you to the broader secondary market and make it easier to hold T-Bills alongside other securities in the same demat account.
NRI eligibility via the RBI retail window
NRIs are eligible to invest in T-Bills under FEMA on a non-repatriation basis — the subscription must flow through a Non-Resident Ordinary (NRO) account. The practical subscription channel for NRIs is the RBI retail window via the Stock Exchange (NSE): non-competitive bidding on the exchange is the standard route, rather than the RBI Retail Direct portal. At maturity, redemption proceeds are credited to the NRI's NRO account and remain subject to the standard USD 1,000,000 per financial year NRO repatriation ceiling (after tax, with chartered-accountant certification on Form 15CB and bank filing on Form 15CA). T-Bills are not eligible under NRE-account rules — only NRO.
T-Bills vs FDs vs liquid funds — when do T-Bills win?
T-Bills are the sovereign-qualifying short-tenure alternative to a 1-year bank FD and to liquid / ultra-short-duration debt funds. Compared with bank FDs, T-Bills offer no TDS at source and no DICGC-style credit-risk ceiling — they sit at the very bottom of the credit-risk curve. Compared with liquid and ultra-short-duration debt funds, T-Bills offer no exit load, no fund-manager risk, no AMC risk — the return is locked at issuance. The right pick depends on your tax bracket and cash-flow horizon, but on a sovereign, no-TDS, capital-gain-only basis, T-Bills win over both FDs (above the ₹5L DICGC cover) and most debt funds for tenures up to one year. Compare all sovereign options on the Government Securities tab before deciding.
Frequently Asked Questions
Does buying T-Bills come out of my NRI LRS remittance limit?
No. Buying T-Bills does NOT count against your USD 250,000 per financial year Liberalised Remittance Scheme (LRS) limit. Remitting funds from an NRE / NRO account into a Treasury Bill is a domestic INR investment under FEMA, not an outward foreign-currency remittance — the LRS ceiling applies specifically to remittances leaving India in foreign currency. NRIs fund T-Bill purchases from their NRO balances in Indian rupees, so the LRS framework is not engaged. Eligible NRIs should consult their authorised dealer (AD) bank on the documentation required at the time of subscription, especially on first-time FEMA compliance.
Are T-Bills held in demat form, like SGB, or as physical certificates?
T-Bills in primary retail issuance under the RBI Retail Direct / Stock Exchange route are held in dematerialised (demat) form — credited to your demat account, with RBI acting as the depository participant via NSDL or CDSL. Unlike Sovereign Gold Bonds, there is no physical-certificate route for retail T-Bill primary issuance — T-Bills match SGB's demat option, not its physical-paper option. Practical upside of holding T-Bills in demat form: secondary-market sale is possible as soon as the bill is credited to the account, which makes a 91-day or 182-day T-Bill a usable parking instrument in a demat portfolio.
How is the gain on a T-Bill at maturity taxed for an NRI?
No Tax Information Statement (TIS) is generated by the issuer for a T-Bill at maturity — RBI does not deduct any tax at source on T-Bill redemption. The discount-to-face-value gain you earn at maturity is treated as a capital gain (the instrument is held as a capital asset, not as interest-bearing debt). 91-day, 182-day, and 364-day T-Bills all mature in under 12 months, so the entire gain falls under short-term capital gains and is added to your Indian taxable income at your marginal slab rate. You must declare it in your Indian ITR; treaty benefits may apply under an applicable DTAA. Consult a chartered accountant on the Form 15CB / 15CA documentation required when remitting the after-tax proceeds out of the NRO account.