@midalantian Backed by RBI doesn't necessarily mean zero liquidity risk. Time and again we have repeatedly seen RBI imposing withdrawal limits whenever a bank comes close to collapse, so you can definitely forget that money for a little longer, also the probability of issues with small finance banks are much higher than any major players, hence more the risk in just standard terms.
TBills are backed by RBI too, but the difference lies in the fact that they are the safest form of assets to hold:
- no change in promised value if you hold to maturity (unlike gold that can fluctuate or debt funds)
- zero default risk unlike bonds ( if TBills are at risk, there are much bigger problems for all of us as the government is about to default and inflation would be through the roof and growth almost stagnant)
- zero liquidity risk if you had analysed your expected returns timelines appropriately ( unlike failing banks or sudden issues like Franklin)
- ni additional charges to be paid to anyone ( unlike overnight funds )
IMO, treasury bills are not for return seeking investors, but a means of keeping capital secure with some returns, it can be one of the places you keep a smaller portion of your emergency funds in, preferably 91D or 182D depending on how you foresee need of capital.
Edit: also, though TBills are generally of low yield, with a little smartness and a bit of luck, you can earn pretty decent returns (10% pre tax) out of it too, especially in current times when a 91D bill has ~6% returns.
