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T-Bill Yield Calculator (2026) — 91, 182 & 364-Day Discount Yields & ₹ Proof
When institutional treasuries, mutual fund liquid schemes, and foreign portfolio investors park hundred-crore liquidity buffers for 3 to 12 months, they rarely leave cash in commercial bank fixed deposits. Instead, they deploy short-term capital directly into Government of India Treasury Bills (T-Bills). Backed by the sovereign authority of the Republic of India through the Reserve Bank of India (RBI), Treasury Bills carry the highest credit rating in the domestic economy with zero credit default risk.
Following the launch of the RBI Retail Direct scheme, retail individual investors can now access these institutional money-market auctions directly from their personal laptops or smartphones. By understanding the mathematics of zero-coupon discount pricing and annualized yields, savers can achieve risk-free yields superior to standard commercial bank deposits while maintaining absolute sovereign security.
Key Takeaways
- The Zero-Coupon Discount Pricing Model: Treasury Bills do not disburse periodic interest coupons. They are issued at a discount to Face Value (₹100) and redeemed at full par upon maturity. Purchasing a 364-day T-Bill at ₹93.50 earns ₹6.50 per unit at maturity, translating to an annualized return of 6.95% p.a.
- Standardized Sovereign Tenures: The RBI auctions T-Bills on Wednesdays across three standardized maturities: 91-Day, 182-Day, and 364-Day. For cash allocations between 3 and 12 months, T-Bills frequently provide 30 to 80 bps higher yields than short-tenure bank fixed deposits.
- Zero-Fee Sovereign Access via RBI Retail Direct: Retail investors can bid non-competitively in primary T-Bill auctions through the official RBI Retail Direct portal with strictly zero brokerage, zero account opening charges, and zero demat maintenance fees, starting with a minimum investment of just ₹10,000 (100 units).
1. The Mathematical Mechanism of T-Bill Yields
Because Treasury Bills pay no interim coupons, calculating their annualized return requires modeling the capital discount against a 365-day day-count convention:
Annualized Treasury Bill Yield Formula
Key Formula Variables:
- Face Value: Fixed at ₹100 per unit by statutory convention.
- Discounted Issue Price: The cut-off clearing price determined at RBI auction (e.g. ₹98.35).
- Days to Maturity: Standard statutory tenures of 91, 182, or 364 days.
- Day-Count Convention: Indian sovereign debt operates on an actual/365 convention (or actual/366 during leap years).
2. Interactive Treasury Bill (T-Bill) Yield Calculator
Calculate your purchase price, total allocation units, and exact annualized discount yield using the computational engine below:
3. Structural Comparison: T-Bills vs. Bank FDs vs. Liquid Mutual Funds
To evaluate where to deploy short-term capital, compare Treasury Bills against commercial alternatives:
Credit / Default Risk
Typical Yield Spread
TDS Deductions at Source
Trading & Secondary Liquidity
Minimum Capital Ticket
Account Custody Costs
| Features & Metrics | Government Treasury Bills (T-Bills)Sovereign Grade | Bank Fixed Deposits (3–12 Months)Commercial Banking |
|---|---|---|
| Credit / Default Risk | Strictly Zero (Sovereign guarantee) | Insured up to ₹5,00,000 per bank only |
| Typical Yield Spread | 6.75% to 7.00% annualized | 6.00% to 6.75% annualized |
| TDS Deductions at Source | Strictly ₹0 (No TDS under Section 194A) | 10% TDS deducted if interest > ₹40,000 |
| Trading & Secondary Liquidity | Tradeable on NDS-OM and stock exchanges | Premature penalty of 0.50% to 1.00% |
| Minimum Capital Ticket | ₹10,000 (Multiples of ₹10,000) | Typically ₹1,000 |
| Account Custody Costs | Strictly ₹0 on RBI Retail Direct | Included in basic savings account |
4. Worked ₹ Numerical Case Study: Allocating ₹10,00,000 Across Tenures
Consider a high-net-worth investor or corporate enterprise allocating a ₹10,00,000 capital reserve across the three sovereign T-Bill tenures:
The table below illustrates the exact discounted issue price, allotted units, maturity proceeds, and gross rupee interest generated:
Comparative T-Bill Yield & Maturity Schedule: ₹10,00,000 (₹)
Cut-Off Auction Prices: 91-Day @ ₹98.35 | 182-Day @ ₹96.70 | 364-Day @ ₹93.50
| T-Bill Tenure | Discount Price per ₹100 Unit | Allotted Units (₹100 Par) | Actual Capital Outlay (₹) | Par Maturity Proceeds (₹) | Gross Profit Earned (₹) | Annualized Yield (%) |
|---|---|---|---|---|---|---|
| 91-Day T-Bill | ₹98.35 | 10,167 Units | ₹9,99,924 | ₹10,16,700 | ₹16,776 | 6.72% p.a. |
| 182-Day T-Bill | ₹96.70 | 10,341 Units | ₹9,99,974 | ₹10,34,100 | ₹34,126 | 6.84% p.a. |
| 364-Day T-Bill | ₹93.50 | 10,695 Units | ₹9,99,982 | ₹10,69,500 | ₹69,518 | 6.97% p.a. |
Strategic Insights from the Cash Flow Analysis:
- The ₹69,518 Annualized Gain: A 364-Day T-Bill generates ₹69,518 in risk-free profit on a ₹10 Lakh outlay without subjecting the investor to commercial bank credit risk or NBFC exposure.
- The Reinvestment Flexibility of 91-Day Bills: By rolling 91-Day T-Bills four times annually, the investor captures quarterly interest rate hikes during tightening monetary cycles while maintaining liquidity every 13 weeks.
5. Taxation Mechanics: Zero TDS Advantage
Understanding how Treasury Bills are taxed in India is vital for net yield optimization:
- Classification of Gains: Because T-Bills are zero-coupon instruments without periodic interest, the difference between the discounted purchase price and the redemption value is treated as Short-Term Capital Gains (STCG) or business income.
- Tax Rates: Under the Income Tax Act, capital gains on debt securities held for less than 12 months are taxed at your applicable marginal income tax slab rate.
- The Zero TDS Operational Advantage: Unlike bank fixed deposits which suffer mandatory 10% TDS deductions under Section 194A, the Reserve Bank of India does NOT deduct any TDS on T-Bill redemption. 100% of your gross principal and profit is credited to your bank account, preserving your full cash flow until advance tax filing deadlines.
6. How to Buy T-Bills in India: The 3-Step Sovereign Process
- Open an RBI Retail Direct Account: Visit
rbiretaildirect.org.inand complete the digital e-KYC using your Aadhaar and PAN. The account is free of all maintenance and management fees for life. - Place a Non-Competitive Bid: Primary auctions occur weekly on Wednesdays. Retail investors bid in the non-competitive bidding category, guaranteeing allocation at the weighted average clearing price discovered by institutional market makers.
- Automatic Settlement & Redemption: Funds are debited via Net Banking or UPI on Thursday settlement. On the maturity date (91, 182, or 364 days later), the RBI automatically credits full Face Value proceeds (₹100 per unit) directly into your linked bank account.
Invest in Government Treasury Bills & SDLs via Demat
Participate in weekly RBI Treasury Bill and State Development Loan (SDL) auctions directly through your trading dashboard with zero delivery brokerage.
Frequently Asked Questions (FAQs)
What are Government Treasury Bills (T-Bills) in India?
Treasury Bills are short-term zero-coupon debt instruments issued by the Reserve Bank of India on behalf of the Central Government. They are issued at a discount to face value and redeemed at full face value (₹100) upon maturity, available in three standardized tenures: 91 days, 182 days, and 364 days.
How is the yield on a Treasury Bill calculated?
Because T-Bills pay no interest coupon, the yield is the annualized rate of return calculated from the discount. The formula is: [(Face Value - Discounted Purchase Price) ÷ Discounted Purchase Price] × (365 ÷ Days to Maturity) × 100.
Is TDS deducted on Treasury Bill maturity proceeds?
No. The Reserve Bank of India does strictly zero Tax Deducted at Source (TDS) when Treasury Bills mature. However, the profit earned (the difference between redemption value and purchase price) is taxable under your applicable income tax slab rate.
What is the minimum investment required to buy T-Bills in India?
The minimum investment in Government Treasury Bills is ₹10,000 (representing 100 units of ₹100 face value), and subsequent investments must be made in exact multiples of ₹10,000.
How do retail individual investors buy Treasury Bills?
Retail investors can buy T-Bills through two primary routes: (1) Directly through the RBI Retail Direct portal (completely free of all brokerage and account fees); or (2) Through stock brokers (such as Zerodha, Groww, or ICICI Direct) via the NSE goBID or BSE direct auction platforms.
Put this into practice
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