Invest in Treasury Bills Online in a Few Clicks

1. ConvenienceAltifi offers a seamless and hassle-free process for purchasing Treasury bills online.
2. Portfolio ManagementYou can easily manage your T-Bill investments through our platform.
3. Easy MonitoringConveniently manage your investments via the dashboard.
4. Zero CommissionYou can invest in securities directly, without paying any commission to Altifi.
5. Backed by Northern ArcWe are backed by Northern Arc, one of India's leading diversified NBFCs.
6. SecurityThe data on our platform is encrypted end-to-end to protect your information.
7. Multiple Payment ModesYou can buy debt securities via internet banking, and UPI.

A Treasury bill, commonly referred to as a T-Bill, is a short-term debt instrument that the government issues to meet its short-term borrowing needs. These bills are issued at a discount to their face value and mature at par. The difference between the purchase price and the face value at maturity constitutes the return on investment for the holder. Key features include:

1. Short-Term InstrumentsTreasury bills are designed as short-term financial instruments, offering maturity periods of 91 days, 182 days or 364 days.
2. Discounted IssuanceT-Bills are issued at a discount to their face value and are redeemed at par upon maturity. For instance, you might purchase a T-Bill with a face value of ₹100 for ₹95. At maturity, the government pays you the full ₹100, with the difference representing your earnings.
3. Risk-Free InvestmentBeing backed by the Government of India, T-bills offer a significant level of security.
4. High LiquidityT-Bills have high liquidity as assets, this means that you can easily buy and sell them in the secondary market. This liquidity ensures that you can quickly convert your T-Bills into cash if needed.
5. No Interest Pay OutWhile other bonds pay periodic interest (coupons), T-Bills do not offer regular interest payments. Instead, the return on investment is the difference between the discounted purchase price and the face value received at maturity.
6. Auction-Based AllocationThe Reserve Bank of India (RBI) conducts regular auctions to allocate T-Bills. You submit a bid, and the RBI allocates T-Bills based on this bid, either through competitive or non-competitive bidding processes. This transparent auction system helps in fair price discovery.
7. Diverse Investor BaseT-Bills are accessible to a wide range of investors, including individual investors, financial institutions, corporations and non-resident Indians (NRIs). This broad investor base enhances their marketability and ensures a stable demand.

Altifi offers a user-friendly platform for purchasing Treasury bills. Here is how you can purchase T-Bills through Altifi:

1. Create an AccountSign up on the Altifi platform. You can download the Altifi app via Google Play Store or Apple App Store.
2. Complete KYCYou can complete the KYC process with your PAN. Next, you need to verify your bank account and Demat account details and provide your e-signature.
3. Browse OfferingsExplore the available Treasury bills and choose the one that suits your investment needs.
4. Make PaymentComplete the payment process through the available payment options.
5. Receive ConfirmationOnce the order is processed, you will receive a confirmation along with the details of your investment.
6. Monitor investmentsYou can use the Altifi platform to track your investment and view returns.

1. Safety and SecurityAs government-backed securities, T-Bills are one of the safest investments.
2. Predictable ReturnsThe return on T-Bills is known at the time of purchase.
3. High LiquidityT-Bills can be sold in the secondary market if needed.
4. Low Minimum InvestmentT-Bills have a low minimum investment requirement, making them accessible to all investors.
5. DiversificationT-Bills provide an opportunity to diversify an investment portfolio.
6. Ease of PurchaseT-Bills can be easily purchased through auctions and secondary markets.

Following are the types of Treasury bills based on their maturity periods:

91-Day T-Bills: These have a maturity period of 91 days.

182-Day T-Bills: These have a maturity period of 182 days.

364-Day T-Bills: These have a maturity period of 364 days.

The yield on a T-Bill can be calculated using the following formula:

Yield = [(Face Value−Purchase Price)/ Purchase Price] × [365/Days to Maturity] × 100

Where:

Face Value is the amount the T-Bill will be worth at maturity.

Purchase Price is the price paid for the T-Bill.

Days to Maturity is the number of days from the purchase date to the maturity date.

1. How do Treasury bills work in India?

   In India, Treasury bills are issued on behalf of the government by the Reserve Bank of India (RBI). They are sold through auctions conducted by the RBI, which occur on a regular basis. As an investor, you can participate in these auctions either directly or through intermediaries such as Altifi, banks and financial institutions.

   The process begins with the government announcing the amount of T-Bills to be auctioned and the maturity period. You can then submit bids indicating the price you are willing to pay. The bids can be competitive or non-competitive. In a competitive bid, you need to specify the discount rate you are willing to accept, while in a non-competitive bid, you agree to accept the discount rate determined by the auction.

   Upon winning the bid, you pay the discounted price and receive the T-Bill, which matures at face value after the specified period. The return on investment is the difference between the purchase price and the face value at maturity.

2. What is the difference between Treasury Bills and Bonds?

   While both Treasury bills and Bonds are debt securities, they differ in several aspects:

   Maturity Period: T-Bills are short-term instruments with maturities of up to one year, whereas bonds have maturities largely ranging from one year to several decades.

   Interest Payments: T-Bills do not pay periodic interest; the return is the difference between the purchase price and the face value. Bonds, on the other hand, pay periodic interest, known as coupon payments.

   Issuance: T-Bills are issued at a discount and redeemed at face value. Bonds are issued at face value and may be traded at a premium or discount in the secondary market.

   Risk and Return: Treasury bills are generally considered safer with lower returns since they are backed by the government, whereas bonds can offer potentially higher returns, with risk levels that vary depending on the type of bond.

   Liquidity: T-Bills are highly liquid due to their short maturity, while bonds may have varying levels of liquidity depending on their term and market demand.

3. What is the minimum investment amount for Treasury bills?The minimum investment amount for Treasury bills is typically ₹10,000. This makes them accessible to investors looking for a safe and secure investment option. Investments above this amount must be in multiples of ₹10,000.
4. Can NRIs invest in Treasury bills in India?Yes, Non-Resident Indians (NRIs) can invest in Treasury bills in India, subject to certain conditions and regulations set by the Reserve Bank of India (RBI). NRIs must use their Non-Resident External (NRE) or Non-Resident Ordinary (NRO) accounts for such investments not on Altifi.
5. How are Treasury bills different from Certificates of Deposit (CDs)?Treasury bills (T-bills) are short-term government securities with maturities of 91, 182, or 364 days, and they do not pay interest but are sold at a discount. Certificates of Deposit (CDs) are time deposits offered by banks with fixed interest rates and varying maturity dates.
6. What are the different ways to buy Treasury Bills in India?

   There are several ways to buy Treasury bills in India:

   Primary Market: As an investor, you can participate in the RBI auctions to invest in T-Bills directly through your Retail Direct Gilt (RDG) account.

   Secondary Market: T-Bills can be purchased from other investors in the secondary market through stock exchanges.

   Banks and Financial Institutions: Many banks and financial institutions offer T-Bill purchase services to their clients.

   Online Platforms: Digital platforms like Altifi provide a convenient way to buy T-Bills online.

7. Are Treasury bills subject to market risks?Treasury bills are considered one of the safest investments because they are backed by the government. However, their prices can be influenced by changes in interest rates and market demand.
8. How can I purchase Treasury bills in the secondary market?Treasury bills can be purchased in the secondary market through online bond platform providers such as Altifi, stock exchanges or financial intermediaries such as banks and brokerage firms.
9. What happens if I need to sell my Treasury bills before maturity?If you need to sell your Treasury bills before maturity, you can do so in the secondary market. Treasury bills are highly liquid, and you can sell them through stock exchanges or financial intermediaries. The price you receive will depend on the prevailing market conditions and interest rates.
10. How do I calculate the yield from my T-bill investments?

    The yield on a T-Bill can be calculated using the following formula:

    Yield = [(Face Value−Purchase Price)/ Purchase Price] × [365/Days to Maturity] × 100

    For example, if you purchase a 91-day T-Bill with a face value of ₹100 for ₹98, the yield can be calculated as follows:

    Yield = [(100−98)/98)] × [365/91] × 100 = 8.18%

11. Are the returns on Treasury bills guaranteed?The returns on Treasury bills are not guaranteed in terms of a fixed interest rate. However, since T-Bills are issued at a discount and redeemed at face value, the return (the difference between the purchase price and the face value) is known at the time of purchase, making them a predictable and a relatively secure investment.
12. What are the eligibility criteria for investing in Treasury bills?Treasury bills can be purchased by individual investors, institutions, corporations and NRIs. There are no specific eligibility criteria, making them accessible to a wide range of investors.
13. How is the income from Treasury bills taxed?The income from Treasury bills, which is the difference between the purchase price and the face value, is considered interest income and is subject to tax as per the applicable income tax slab rates of the investor.