Treasury Bills for UPSC

Treasury bills (T-bills), or T-Bills, are government securities with maturities of less than one year, typically issued for 91, 182, or 364 days, serving as very safe, short-term debt instruments for raising government funds. 

They are sold at a discount and redeemed at face value, providing returns without direct interest payments. 

Key Characteristics of T-Bills:

Short-Term: Maturities are always under 12 months (e.g., 91, 182, 364 days).

Zero-Coupon: They don't pay periodic interest; you earn by buying them cheaper and getting the full face value at maturity.

Low Risk: Backed by the government, making them virtually risk-free.

High Liquidity: Easily bought and sold in the market before maturity.

Money Market Instruments: Used by the central bank to manage short-term cash flow and monetary policy. 

In contrast, longer-term government debt (like Government Bonds or Dated Securities) have maturities of one year or more and pay fixed interest. 

Memory Trick 

T BILL = less than 1 year G sec + 0 coupon + high liquidity + money market instrument