Gap between 91 Dyas T-bills and 91 Days FD

Bonds
1

In recent months gap between 91 Days T-Bills and FD is getting huge. Any idea why so?
Current FD rates for 91 Days are 3.90% while T-Bills are fetching 5.59%.

2

Banks have adequate liquidity, so they don’t need to raise the deposit rates to attract more funds.

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3

That is surely one point. This makes 91 Days T-Bills really attractive. Would be nice to accumulate them.

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4

Again, FD rates depend on the Bank as well. I just checked IDFC 91 days, it is 4%. RBL bank is 4.5%. The rates keep varying between banks. For Senior Citizens, AU bank offers 5.25%

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5

Right, I compared with T-Bills as it’s ultra-safe so I took base as SBI.

6

Agree. It is right to compare apple with apple. Hence comparing Tbill with SBI bank rate is the right way to look at it. However, as bank deposits are guaranteed upto 5 lacks (both private and psu), if the amount involved is upto 5 lacks, you could consider other bank rate as well.

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