Treasury bills are money market instruments issued by the Government of India as a promissory note with guaranteed repayment at a later date.
Treasury Bills, also known as T-bills are the short-term money market instrument, issued by the central bank on behalf of the government to curb temporary liquidity shortfalls.
Treasury Bills Maturity Date:
26-week T-bill is priced at $9,800 on issuance to pay $10,000 in six months. No interest payments are made.
The investment return comes from the difference between the discounted value originally paid and the amount received back at maturity, or $200 ($10,000 - $9,800).
In this case, the T-bill pays a 2.04% interest rate ($200 / $9,800 = 2.04%) for the six-month period.
In other words, you would pay $9,800 for the T-Bill and get $10,000 back ($9,800 principal + $200 interest) in six months.