Fixed income SDL T-Bill G-Sec

SDL vs T-Bills vs G-Secs: comparison

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SDLs, T-Bills, and dated G-Secs are all sovereign-rated debt issued through the RBI auction window. Key differences:

FeatureT-BillSDLDated G-Sec
IssuerCentral governmentState governmentCentral government
Tenor91 / 182 / 364 days10+ years typical1 to 40 years
CouponNone (zero coupon)Semi-annualSemi-annual
YieldDiscount to face valueCoupon + priceCoupon + price
Auction frequencyWeeklyWeekly (Tuesdays)Bi-weekly (Fridays)
Sovereign-backedYesYes (state)Yes (Centre)
LiquidityModerateLowModerate to good
Minimum on ZerodhaRs 10,000Rs 10,000Rs 10,000

When to use which

GoalPick
Park funds for 3-12 monthsT-Bill
10-year+ steady-coupon investmentG-Sec or SDL
Highest yield among sovereignSDL (slightly higher than G-Sec)
Maximum liquidityG-Sec

Risk hierarchy

All three are sovereign-rated:

  • T-Bill / Dated G-Sec: Centre-backed.
  • SDL: State-backed, with RBI’s market borrowing support; effectively sovereign.

Interest-rate risk applies to longer-tenor instruments. T-Bills (sub-1-year) have minimal duration risk.

See also

External references

References

  1. RBI, Government Securities Market Primer, rbi.org.in.
  2. Zerodha, G-Sec, T-Bill, SDL FAQ, support.zerodha.com.

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