Fixed Deposits vs Treasury Bills: 5 Key Differences

FD and Treasury Bills differ in terms of investment type, tenure, risk level, liquidity, and returns, catering to diverse financial goals.
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FD vs Treasury Bills
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3 mins
29-January-2026

When it comes to low-risk investments, fixed deposits and treasury bills often top the list. Both are considered stable, predictable, and suitable for conservative investors. However, they serve slightly different purposes depending on your investment horizon, liquidity needs, and return expectations.

Understanding how fixed deposits and treasury bills differ can help you choose the option that aligns best with your financial goals—whether you want short-term parking of funds or long-term wealth stability.

For investors seeking predictable long-term returns without market volatility, Bajaj Finance Fixed Deposits offer a dependable option backed by strong credit ratings.

What is a Fixed Deposit?

A fixed deposit (FD) is one of the most preferred investment options in India. It involves depositing a lump sum for a fixed tenure at a predetermined interest rate. At maturity, you receive the principal along with compounded interest.

Bajaj Finance Fixed Deposits offer competitive interest rates of up to 7.30% p.a., with flexible tenures ranging from 12 to 60 months. You can also plan your investment using the FD calculator to estimate maturity value and interest earnings accurately.

With Bajaj Finance FDs, you get fixed returns, flexible payout options, and a fully digital booking experience—making investing simple and transparent. Check FD rates.

Fixed Deposit

  1. Trusted by over 5 lakh customers
  2. Fixed Deposits worth more than Rs. 50,000 crore booked
  3. Rated CRISIL AAA/STABLE and [ICRA]AAA(STABLE)
  4. Up to 0.35% p.a. extra interest offered for senior citizens
  5. Flexible interest payout options available - Monthly, Quarterly, Half-yearly, Annually or at Maturity

By proceeding, you agree to our Terms and Conditions

What is a treasury bill?

A treasury bill (T-bill) is a short-term money market instrument issued by the Government of India to meet short-term funding needs. These are issued at a discount and redeemed at face value on maturity—the difference being the investor’s return.

Treasury bills are considered virtually risk-free since they are backed by the government and have short tenures of up to one year.

Key differences between Fixed Deposits & Treasury Bills

Both FDs and treasury bills are low-risk investments, but they differ across multiple parameters.

Profitability in terms of interest

Treasury bills often offer slightly higher short-term yields compared to bank FDs. However, company FDs can offer more competitive returns. Bajaj Finance Fixed Deposits provide interest rates of up to 7.30% p.a., making them attractive for medium- to long-term investors.

Bajaj Finance FDs help you lock in attractive rates for longer tenures—unlike treasury bills, which need frequent reinvestment. Book FD.

Flexibility in withdrawing funds

Fixed deposits allow premature withdrawal, though it may involve a penalty or reduced interest. Treasury bills, on the other hand, can be liquidated through government auctions and have very short maturities (as low as 91 days).

While T-bills offer higher short-term liquidity, FDs offer better tenure flexibility, especially for long-term planning.

Risk-factor and credibility

Treasury bills are considered risk-free due to government backing. Fixed deposits are also regarded as safe, especially when issued by highly rated institutions.

Bajaj Finance Fixed Deposits carry CRISIL AAA/STABLE and [ICRA]AAA(Stable) ratings, reflecting strong financial stability and credibility.

With Bajaj Finance FDs, you get the reassurance of top-tier safety ratings (AAA/STABLE from CRISIL and ICRA) along with assured returns. Open FD.

Tax benefits and service fees

Treasury bills are not subject to TDS, but service or transaction charges may apply. Interest earned on fixed deposits is taxable when it exceeds Rs. 50,000 for individuals and Rs. 1,00,000 for senior citizens in a financial year.

While both have tax implications, FDs offer clear visibility of returns, making tax planning easier.

A treasury bill works well for short-term surplus funds. However, if you’re looking to grow money steadily over a longer duration, Bajaj Finance Fixed Deposits provide a reliable alternative. You can start investing with just Rs. 15,000.

Fixed deposit variants

Highest Credit Ratings | Trusted with over 1.4 million Deposits | Assured Returns on FD
Recommended

Fixed Deposit - 60 Months

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Senior Citizen

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Age below 60

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Minor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - HUF

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Sole Proprietor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Types of fixed deposit

Bajaj Finance offers two types of fixed deposits:

a. Cumulative fixed deposit
Interest is compounded and paid at maturity, making it suitable for long-term wealth accumulation.

b. Non-cumulative fixed deposit
Interest is paid out monthly, quarterly, half-yearly, or annually—ideal for those seeking regular income.

Types of treasury bills

Treasury bills are classified based on maturity period:

Maturity period

Auction frequency

Minimum investment

14 days

Every Wednesday

Rs. 1 lakh

91 days

Every week

Rs. 25,000

182 days

Every alternate week

Rs. 25,000

364 days

Every alternate week

Rs. 25,000


Factors to consider when choosing between FDs and treasury bills

  • Investment horizon: Treasury bills suit very short-term needs, while FDs work for both short- and long-term goals
  • Risk tolerance: Treasury bills are government-backed; FDs issued by highly rated NBFCs offer strong safety
  • Returns: FDs generally provide higher returns for longer tenures
  • Liquidity needs: Treasury bills are liquid in the short term; FDs may involve penalties for early withdrawal

Conclusion

Treasury bills and fixed deposits are both safe investment avenues, but they cater to different needs. Treasury bills are ideal for short-term parking of funds with minimal risk. Fixed deposits, on the other hand, offer greater flexibility, assured returns, and suitability for long-term financial planning.

For investors seeking stability, predictable income, flexible tenures, and high safety ratings, Bajaj Finance Fixed Deposits can form a strong foundation in a low-risk investment portfolio. Check eligibility.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator

FD Return Calculator

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RD Calculator

PF Calculator

Gratuity Calculator

Frequently asked questions

What are factors to Consider When Choosing Between Treasury Bills and FDs?

Consider factors like risk tolerance, investment goals, liquidity needs, and interest rate outlook when choosing between Treasury Bills and FDs.

Are treasury bills riskier than fixed deposits?

Generally, Treasury Bills are considered lower-risk compared to fixed deposits due to government backing. However, FDs provide fixed returns, while T-bill returns depend on market rates.

Treasury bills vs fixed deposits: Which option gives higher returns?

The returns on Treasury Bills and FDs vary. T-bills may offer higher returns in some scenarios, but FDs provide fixed, guaranteed returns.

Can you invest in both treasury bills and FDs at the same time?

Yes, investors can diversify their portfolio by investing in both Treasury Bills and FDs simultaneously, balancing risk and returns.

Who regulates the prices of treasury bills?

The Reserve Bank of India (RBI) regulates the prices of treasury bills in India.

Which is better, T-Bills or FDs?

The "better" option depends on your investment goals and risk tolerance.

  • T-bills: Ideal for short-term, low-risk investments with high liquidity.
  • FDs: Offer higher potential returns for medium- to long-term goals, but with slightly higher risk compared to T-Bills.

Is a Treasury Bill the same as a Fixed Deposit?

No, Treasury Bills and Fixed Deposits are distinct financial instruments.

  • T-bills: Short-term debt securities issued by the government.   
  • FDs: Deposits made with banks or financial institutions for a fixed period, earning a fixed interest rate.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.