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Fixed Deposits (FDs) and Treasury bills are great investment tools if you have a low-risk appetite. FDs are mostly an investment service offered by banks and NBFCs, providing good interest returns compared to average saving account returns. The T-bills or treasury bills, on the other hand, are money market instruments. The government offers T-bills when it is in need of some capital. Simply put, it is a short-term borrowing tool the government uses to borrow some funds for a limited time. And, those who lend money to the government earn interest on the loaned money. In case you don't know, treasury bills come with three-term periods that are for 91 days, 182 days, and a year.


You can choose any of these term periods to get the returns. The return of T bills is higher as compared to FDs. However, both of these investment options are safe with guaranteed returns. To help you decide which of these two options is best for you, we have tried to include every piece of information here. You would be in a better position to weigh the pros and cons of FDs and T-bills and make a well-informed decision.

Interest Rates of FD and Treasury Bills

As mentioned, the treasury interest rates are generally better as compared to the FD returns. The gain you get with an FD is 6%. While T-bills can get interest return up to 6.40 per cent for 2.9 months, 6.52 per cent for 5.9 months and 6.64 per cent for a year. However, if you still want to invest in FDs, you can go for good company's FDs that can yield you a higher interest in your money.

Withdrawal Flexibility

When it comes to accessing and withdrawing your investment, the FD has a withdrawal option before maturity. But, it comes with a penalty fee and may also negatively affect your interest gain. In the case of the T-bills, you can access your funds anytime as it is a short-term investment. You can quickly redeem your funds at auctions organised frequently at a discount rate. Thus, the T bills offer more liquidity as compared to FDs.


treasury fixed deposit


Both FD and the treasury bills are safe, low-risk investments. Banks or companies offer the FD as safe as a savings account, thus cutting the risk to zero. And the t-bills are backed by the government with guaranteed returns. Government always has funds, so you know you're going to get your capital back, which is not the case when investing in ordinary shares of companies.

Tax Benefits

The interest you would gain on the FD money is taxable. To be more precise, earning an interest of ₹10,000 in a year is taxable. For T bills, you won't have to pay any taxes on the returns, but you may be charged for services rendered by the bank.


A Treasury bill is a good option for quick short-term investment to earn some extra money. But, they may fall flat if you are looking for a long-term investment with hefty returns. For novice or/ and low-risk investors, an FD would be a better option, even though it may not deliver you a considerable amount of returns. An online FD interest rate calculator will aid you in making a wise financial decision by letting you know the returns on investment and maturity amount beforehand. But, both FDs and treasury bills are safe investment options that are low-risk investments for your portfolio. Now that you know the benefits and drawbacks of each tool, you can make an informed choice as per your preference and needs.


The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort. 

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of 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. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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Yes, suppose you go for a non-cumulative FD option. In that case, you can withdraw your return periodically before the maturity of the FD. You can choose monthly, quarterly and annual options to redeem your interest returns.

Yes, even if you don't have a bank account in any bank, you can open an FD with your Adhaar Card and Pan Card.

Here is no restriction on how many FDs you can own. You have as many FDs as you want and at any bank.

You can have a minimum FD term period of 7 days.

Yes, the treasury bills were first published in 1917. The RBI conducted an auction to give every individual and organisation a chance to invest in the t-bills.

Treasury bills can be purchased directly from primary markets as well as secondary markets. You can also buy it from a broker or a bank.

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