G-sec vs T-bill: what is the difference between government bonds and treasury bills?

Credit is the same, since both are owed by the Government of India. What differs is how long your money is locked to a rate and how much the price can move before maturity.

Side by side

	T-bill	Dated G-sec
Term	Within a year	Several years
Income	No coupon; issued at a discount, repaid at ₹100	Coupon on fixed dates
Tax	Discount taxed as short-term capital gain at slab	Coupon taxed at slab; gain on sale under capital gains rules
Auction example (Fyers cut-offs)	Bid Monday to Tuesday, auction Wednesday, settle Thursday	Bid Tuesday to Thursday, auction Friday, settle Monday
Non-competitive limits	5% of each issue reserved; ₹10,000 minimum	₹10,000 minimum, ₹2 crore face value cap per security per auction
Price risk before maturity	Small	Larger, and grows with term
On the exchange	Trades on the order book	Trades at the dirty price, including accrued interest

Sources: Zerodha, Fyers, HDFC Securities, NSE circulars. Cut-off times differ by broker.

Which carries more risk?

The G-sec, for a seller before maturity. A dated G-sec's price falls when market yields rise, so a long bond can trade well below 100; a TradingQnA thread asks why the 6.76% G-sec maturing in 2061 traded so low (TradingQnA). Held to maturity, both repay face value. A T-bill's short term leaves little room for its price to move, but you must reinvest every few months at whatever the next auction pays.

What does each pay?

A T-bill's return is fixed at allotment: a 91 day bill at ₹98.25 earns about 7.14% annualised, an illustrative figure (how to buy T-bills). A G-sec bought at auction earns the auction yield to maturity; one bought on the exchange earns the yield at the price you pay, which is why a G-sec above 100 is not overpriced by itself (TradingQnA). See YTM vs coupon.

Where and how do I buy them?

The same channels sell both: RBI Retail Direct, Zerodha and Fyers with no bid fee, Upstox and HDFC Securities at 0.06% plus GST (RBI, Zerodha staff, Upstox). Retail Direct can roll T-bills over automatically with auto-bids since 6th Aug 2025 (Business Standard). At Fyers, G-secs and T-bills can be pledged, while SDLs are not accepted (Fyers).

Where do SDLs fit?

SDLs are dated bonds of state governments, bought in the same auctions and the same way as G-secs. They behave like G-secs on price, with state rather than central credit. See how to buy G-secs and SDLs, and RBI Retail Direct vs Zerodha for the 2 free bidding routes side by side.