Difference Between G-Secs, T-Bills, and SDLs: A Comparative Guide

What is the difference between G-Secs, T-Bills and SDLs?

G-Secs, T-Bills, and SDLs are distinct debt instruments issued by the Indian government to garner funds. While all three are deemed secure, low-risk investments, they offer varied features to cater to different investment objectives. Here's a comparative breakdown:


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  1. Tenure: Reflects how long the investor will hold the instrument before receiving the principal amount. Typically, longer tenures translate to higher risk and returns.
  2. Liquidity: Represents how effortlessly the instrument can be traded in the secondary market, determining the speed at which the investment can be turned to cash. Generally, greater liquidity means reduced risk and returns.
  3. Interest rates: Signify the return on investment. Typically, elevated interest rates indicate heightened risk and returns.
Making an Informed Choice:
  • T-Bills: Suitable for those eyeing a short-term, low-risk, high liquidity avenue. As of June 2021, they offered interest rates between 3.25% to 3.46% p.a.
  • G-Secs: More apt for individuals keen on long-term investments with higher returns. During the same period, their interest rates fluctuated between 5.63% to 6.76% p.a.
  • SDLs: These offer a balance. Backed by state governments with a tenure shorter than G-Secs, their interest rates in June 2021 ranged from 6.25% to 7.15% p.a.
We suggest analysing your financial objectives and risk tolerance to select the most fitting instrument.

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