What are bonds and T-bills or Treasury bills?

Table of Contents

Basics of Bonds and Treasury bills

 

Whenever we want loan we approach our Bank. Bank give us loan and apply some interest like wise, government want loan to invest in build roads, bridges, dams, power generation, hospitals, etc. When they run short of money, they approach their bank for a loan, which is the reserve Bank(RB).

Then RB release some important securities for getting loan from market in the form of shares etc.

Definition of T-Bills:

Such loan that the government intends to repay within 365 days or a year is called the Treasury Bills or T-bills.

Definition of Bonds:

Loans which the Government intends to repay over many years long term loan are called the Bonds.

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