T-bill rates are nearly 2% higher than FD rates

Just saw this tweet by @nithin and as he rightly mentions T-bill and G-sec rates are nearly 1.5-2% up and that’s sizable considering the fact that all these are < 12 months in terms of the tenure and carry the same risk. (basically zero risk)

What is it that attracts people to FDs despite government securities offering much better returns compared to FDs? FDs are already yielding returns which are much lower than inflation and adding tax to that would make the returns even more lower. That’s why I feel this 2% extra return matters.

Should the government do more to promote these instruments?


FDs have been here for decades, any person can visit his branch and make an FD, and doing this online literally take seconds. You don’t need any other account like demat to make a FD. Withdrawal even prematurely is also easy. A pretty simple product in every sense.

Cant say all of these are true for FD, and of course people who invest in debt funds are indirectly investing in these, as almost all funds buy some portion of Gsecs.

Also, I think in principle and in practice, PSU FDs give more than Gsecs, private bank FDs more than PSU FDs, and debt funds a bit more than all of these. And PSU FDs have been rising, so will others.

Canara Bank offers 7%

My bank offers me 7% and for diwali they offered 7.5% :slight_smile:

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There are so many banks other than the one mentioned which offers better fd rates that what is mentioned.

In fact i wonder who place fd with these banks when rates are so low when compared to other banks.

Right now saw an adv of ujjivan small finance bank offering 8 percent

yeah thats what i thought when i saw this. There are way many good banks that are offering better rates.

How can we Invest in T-bills.

All I know is GILT Funds for investing in govt bonds. Is it different?

Tax exemption upto certain threshold is needed to encourage people to finance government and reduce interest liability to govt and some relief on the tax front to people.

Win win situation for both

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Hi @metallicsigma

You can buy T-bills on coin easily.

They are open for investing every monday.

Check the below article out to know more


Hey there, in the indicative yield column shown on coin in Government Bond section, is that the approximate return i will be getting on the amount invested?

Hi @Gnome

You are right. It is an approximate return that you will be getting based on LTP (it is given for comparison purpose). The actual yield of the security depends on the weighted average price discovered in the auction.

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Thank you very much,

I have two more question.
If I buy it, what is the minimum amount I have to invest?
And can I sell it if I need money to invest in stocks. (for Transferring money from debt to equity)

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I think it is 10,000, don’t remember it exactly. And I don’t think no, you cannot sell them when you want, and the amount will be credited only after the maturity date.

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Any idea how long is the maturity period ?

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Days, multiples of 91 days I think, less than 365.

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Nice reads on this topic. Easily explained

The comparison is between apples and oranges. Folks who are saying their banks offer better rates are completely disregarding a major USP of the TBills, its 100% safe. Unless we are in a SriLanka like situation, the government will always pay to its creditors the amount it owes them.

The same cant be said for any small finance banks and even a few large banks are susceptible to the risks.
Also, the rates TBills are offering are for <1 year period, in my understanding, any bank offering ~7% is also locking in your money for >1, in some cases 2 years.

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Deposits upto 5 lacks PER CUSTOMER is fully insured by DICGC, hence the risk aspect is fully removed from the equation.

Equitas is offering 5.5 to 7% on a tiered basis on SB account, same with RBL bank which is slightly lower. With regard to FD, Ujjivan is giving 8% for 80 weeks.

Both the above banks are covered by the Insurance as per DICGC website.

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Each depositor is insured by the Deposit Insurance and Credit Guarantee Corporation(DICGC) upto the maximum of Rs. 5 Lakh, for both principal and interest amount held by him in the same right and
same capacity.

Copied and pasted.

So if the FDs are more than 5 lacs, for the remaining amount, we have to wait till the problem gets sorted out. Not the case with Gsecs. Hence the concept of ‘too big to fail’ banks, where we can make FDs, SBI, HDFC and ICICI.

These are relatively risky choices, compared to established bigger banks.

What is the point? I thought I mentioned the same thing which you have mentioned.

That is why you spread your deposits across banks and across family members.