Five smart things to know about Treasury Bills (T-bills)

1) T-bills are shortterm securities issued on behalf of the government by the RBI and are used in managing shortterm liquidity needs of the government.

2) 91-day T-bills are auctioned every week on Wednesday and 182-day and 364-day T-bills are auctioned every alternate week on Wednesdays.

3) The RBI announces the exact dates of auction, the amount to be auctioned and payment dates by issuing press releases prior to every auction.

4) Treasury bills are issued at a discount and are redeemed at par. The difference is the interest to the investor.

5) Provident funds and banks are the large buyers of T-bills for their statutory need to hold government securities.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.