Find out whether Treasury Bills (T-bills) and Fixed Deposits (FDs) could help maximise your returns!
T-Bills and Fixed Deposits are two secure investment options that could help you accumulate wealth in the long term. FDs, issued by banks and NBFCs, offer attractive returns. These returns surpass those of savings accounts. On the other hand, T-bills cater to short-term needs. They are issued by the government and offer competitive returns. Explore these options to avail higher returns while maintaining your risk tolerance.
Parameters |
Fixed Deposits |
Treasury Bills |
Issuer |
Issued by banks and NBFCs |
Issued by the Government of India |
Tenor |
Between 7 days to 10 years |
Typically, 91 days, 182 days, 364 days |
Interest Rates |
Fixed throughout the term |
Fluctuates based on auction results |
Returns |
Generally higher potential returns |
Lower returns than FD |
Liquidity |
May attract premature withdrawal charges |
Can be sold in the secondary market |
Risk |
Lower credit risk (depends on issuer's creditworthiness) |
Low risk (backed by government) |
Interest Payout |
Monthly, quarterly, half-yearly, or annually |
Paid at maturity |
Minimum Investment |
Relatively low (depends on issuer) |
May have a higher minimum investment amount |
Here are some of the interest rates offered on FDs and T-bills:
Investment Type |
Interest Rate Type |
Interest Rate |
Fixed Deposits |
Fixed |
|
Treasury Bills |
Discounted Yield |
91 Days - 6.84% 182 Days - 6.99% 364 Days - 7.01% |
Disclaimer: The rates mentioned in the table as of 27th June 2024.
RBI’s repo rate influences the FD interest rates. A higher repo rate translates to higher FD interest rates.
Issuers offer higher FD interest rates to attract more deposits. This helps them meet their financial requirements.
Fixed deposits with longer maturity periods typically have higher interest rates. Short-term deposits usually offer lower rates.
Issuers may hike interest rates during economic growth periods to attract more investors.
The interest rates offered on-bills are determined by the investor bids at auctions.
The government may offer higher interest rates on T-bills to attract more capital.
Increase in inflation could lead to a hiked interest rate for T-bills.
Demand for T-bills may rise when low-risk investments are scarce. This could offer higher returns.
Changes in the repo rate made by RBI may indirectly affect the T-bills interest rates.
Before investing in a savings tool, understand its benefits. This helps you make an informed decision. Here are some benefits of investing in FDs:
Cumulative FDs allow your interest to earn interest over time to help maximise your returns.
Booking an FD is simple and convenient. Many banks and NBFCs offer online application processes.
FDs typically offer higher interest rates compared to regular savings accounts.
Most issuers provide overdraft facilities to help depositors access their invested funds during financial emergencies.
Liquidate your fixed deposit anytime with the premature withdrawal facility; subject to certain penalty charges.
Here are some advantages of investing in T-bills:
T-bills are issued by the Government of India and offer a high degree of safety for your investment.
Returns earned from T-bills are based on the purchase price and maturity value, allowing you to plan your investments with clarity.
T-bills offer liquidity. You can sell them before maturity in the secondary market.
Adding T-bills to your investments can reduce overall portfolio risk. They are a low-risk, secure asset class. This helps create a more balanced investment strategy.
FDs are fixed-term investments offered by banks, NBFCs or post offices, while Treasury Bills are short-term government-backed securities.
Both FDs and Treasury Bills are considered low-risk investments, providing a level of security to investors.
FDs allow premature withdrawals with penalties. Treasury Bills offer more flexibility, allowing investors to access funds at regular auctions.
FDs are known for their fixed returns, guaranteed by financiers, making them suitable for risk-averse investors looking for stability.
Treasury Bills are backed by the government, ensuring credibility and providing investors with a secure option, unlike ordinary shares.