Fixed deposits and Treasury Bills 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.

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Comparison Between Fixed Deposits vs Treasury Bills


Fixed Deposits 

Treasury Bills


Issued by banks and NBFCs

Issued by the Government of India


Between 7 days to 10 years

Typically, 91 days, 182 days, 364 days

Interest Rates

Fixed throughout the term

Fluctuates based on auction results 


Generally higher potential returns

Lower returns than FD


May attract premature withdrawal charges

Can be sold in the secondary market


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

Interest Rates for Fixed Deposits and Treasury Bills

Here are some of the interest rates offered on FDs and T-bills:  

Investment Type

Interest Rate Type

Interest Rate

Fixed Deposits


  • Bajaj Finance Ltd. – 8.85% p.a.

  • AU Small Finance Bank – 8.50% p.a.

  • Mahindra Finance Ltd. – 8.30% p.a.

  • YES Bank – 8.50% p.a.

  • Shriram Finance – 9.40% p.a.

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. 

Factors affecting the interest rates

Fixed Deposits 

  • 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. 

Treasury bills

  • 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. 

Benefits of Fixed Deposits

Before investing in a savings tool, understand its benefits. This helps you make an informed decision. Here are some benefits of investing in FDs:  

  • Compounding Interest

Cumulative FDs allow your interest to earn interest over time to help maximise your returns. 

  • Effortless Application

Booking an FD is simple and convenient. Many banks and NBFCs offer online application processes.

  • Higher Returns

FDs typically offer higher interest rates compared to regular savings accounts.

  • Overdraft Facility

Most issuers provide overdraft facilities to help depositors access their invested funds during financial emergencies.  

  • Liquidity 

Liquidate your fixed deposit anytime with the premature withdrawal facility; subject to certain penalty charges. 

Benefits of Treasury Bills

Here are some advantages of investing in T-bills: 

  • Secure Investments

T-bills are issued by the Government of India and offer a high degree of safety for your investment.

  • Predictable Returns

Returns earned from T-bills are based on the purchase price and maturity value, allowing you to plan your investments with clarity. 

  • Flexibility

T-bills offer liquidity. You can sell them before maturity in the secondary market.

  • Diversified Investments 

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.


The information provided by BFDL is related to the rates provided by Banks and Deposit taking NBFCs as available from public domain and under no circumstances is intended to be source of advice or recommendation of any financial investment advice or endorsement of any sort. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers and use of such information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. Display of any intellectual property along with the related product information does not imply BFDL’s partnership with the owner of the intellectual property of such products and is solely for the purpose of information, unless otherwise provided by BFDL.


What distinguishes Fixed Deposits (FDs) and Treasury Bills as investment options?

FDs are fixed-term investments offered by banks, NBFCs or post offices, while Treasury Bills are short-term government-backed securities.

How does the risk level compare between FDs and Treasury Bills?

Both FDs and Treasury Bills are considered low-risk investments, providing a level of security to investors.

Can I withdraw funds before maturity with FDs and Treasury Bills?

FDs allow premature withdrawals with penalties. Treasury Bills offer more flexibility, allowing investors to access funds at regular auctions.

What are the key features that make FDs a preferred choice for some investors?

FDs are known for their fixed returns, guaranteed by financiers, making them suitable for risk-averse investors looking for stability.

How do Treasury Bills ensure credibility and safety for investors?

Treasury Bills are backed by the government, ensuring credibility and providing investors with a secure option, unlike ordinary shares.

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