FD is still considered the favourite funding tool among our parents and they don’t give a shit on figuring better options other than that. As we know FD’s hardly beat inflation.
So what’s it for?🤔
Just to preserve our hard earned money!
But what if you got better option than FD where you get better safety than FD plus better returns than FD. So, I am talking about Treasury Bills. Treasury bills are money industry instruments issued by the
Government of India as a promissory note with quaranteed
repayment at a later date. Funds collected through such tools
are typically used to meet short term requirements of the government, hence, to reduce the overall fiscal deficit of a country.
They are primarily short-term borrowing tools, having a maximum tenure of 364 days, available at zero coupons (finance charge) rate. They are issued at a discount to the published
nominal value of government security (G-sec).
Government treasury bills can be procured by individuals at a
discount to the face value of the security and are redeemed at their nominal value, thereby allowing investors to pocket the difference. For example, a 91-day treasury bill with a face value of Rs. 120 can be bought at a discounted price of Rs.
118.40. Upon maturity, individuals are eligible to receive the entire nominal value of Rs. 120, which allows them to realise a profit of Rs. 1.60.
➡️Short term capital gain (STCG) realised on these bills is subject to STCG levy at rates applicable as per the earnings levy
slab of an investor.
Source: Groww
#education #financial #knowledge #investing #rbi #money institution
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