What Are T-Bills?
Treasury Bills (T-bills) are short-term government securities. They are safe investment options issued by the RBI to borrow money for a short period (91, 182, or 364 days). T-bills do not pay interest but are sold at a discount and redeemed at face value.
What Has RBI Introduced?
The RBI has launched a Systematic Investment Plan (SIP) feature for T-bills through its Retail Direct platform. This allows retail investors to invest in T-bills like mutual funds—small amounts regularly.
How Will It Work?
- Investors can automate their investments using the auto-bidding feature.
- Both new investments and reinvestments can be planned.
- It helps in saving for short-term or long-term goals, such as building an emergency fund.
What Is the Retail Direct Platform?
This RBI platform allows individuals to:
- Open gilt accounts directly with RBI
- Buy/sell government bonds (G-Secs) and T-bills
- Participate in auctions or trade in the secondary market
Why Is This Important?
- Makes government securities more accessible to common people
- Encourages savings through safe instruments
- Reduces the dominance of institutions like mutual funds and insurance firms in government bond markets
Current Investment Trends
- 68% of investments via Retail Direct go into T-bills
- Less goes into longer-term instruments like central/state government securities and gold bonds
Quotation
“An investment in knowledge pays the best interest.” – Benjamin Franklin
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