Bank FDs vs Government Bonds: What are G-Secs, T-Bills and do they offer more returns? Read here

Planning to invest your savings in a way that can offer you good returns? Well, that can be a tough choice. From mutual funds to stock markets, there are a number of options available for investment these days. While all of them have their merits and demerits, one of them that you may not have considered are treasury bills or T-Bills. According to the Reserve Bank of India, these bills are “short term debt instruments issued by the Government of India and are presently issued in three tenors, namely, 91 day, 182 day and 364 day.” Moreover, these T-Bills are issued at a discount and can be redeemed at face value at the time of maturity. Another option you can look for is government securities or G-Secs. These are issued by the government to meet its debt obligation. These can be either short term (less than a year’s duration like treasury bills) or long term (like government bonds or dated securities with a tenor of over a year.) Things to note if you are investing in T-Bills or G-Secs: These bonds are backed by the government, so are considered safer than bank fixed deposits or other investment options. They also offer higher interest rates than short term FDs. According to Nithin Kamath, Founder and CEO of Zerodha, “At current rates, T-bills & G-secs are much better than a bank FD.” In a tweet, he also shared the interest rate being offered by banks versus that being offered by T-Bills. View the tweet here:

At current rates, T-bills & G-secs are much better than a bank FD.

Most people still don't know that you can easily buy T-bills & G-Secs on exchanges/your trading a/c without CSGL etc.

Btw, they're open for investing every Monday on @CoinByZerodha https://t.co/iJolUvPBFU pic.twitter.com/rpBWIs1pOE

— Nithin Kamath (@Nithin0dha) November 7, 2022

According to the tweet, while major lenders like HDFC, SBI, ICICI and Axis Bank are offering 4.5 percent interest on a tenor of 91 days, T-Bills are offering 6.47 percent. For a term of 182 days, treasury bills are providing customers with 6.8 percent interest, while most banks are offering interest between 5.25 and 5.75 percent. Similarly, for a 364-day tenor, T-Bills offer 6.95 percent interest in comparison to the 5.50-5.75 interest provided by banks. Advantages of investing in G-Secs: These offer assured returns and carry virtually no risk of default. Hence, they are also called “risk-free gilt-edged instruments” by the RBI. These securities can easily be sold in the secondary market to meet cash requirements. While the price of G-Secs keeps fluctuating in the market, you can easily get more details at the RBI’s website. Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.