Treasury Bill
A short-term government security issued at a discount to face value and redeemed at par, with no coupon.
Formula
Yield = [(Face Value - Price) / Price] x (365 / Days to Maturity) x 100
Unit
%
In depth
Treasury bills are issued in 91, 182 and 364-day tenors and pay no interest — the return is the difference between the discounted purchase price and the face value received at maturity. Their short maturity means negligible interest rate risk and no credit risk, which makes the 91-day bill the standard proxy for the short-term risk-free rate. They are the main instrument in liquid fund portfolios and a component of many money-market strategies. The discount convention means the quoted price and the yield move inversely, as with any bond.
Worked example
A 91-day bill of ₹100 face value bought at ₹98.30 yields (1.70 / 98.30) x (365 / 91) x 100 = 1.729% x 4.011 = 6.94% annualised.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Treasury Bill” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.