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1) What are Treasury Bills and Treasury Bonds?
A Treasury Bill (T-Bill) is a short-term debt instrument issued by the Government of the People's Republic of Bangladesh with a maturity period of less than one year.
A Treasury Bond (T-Bond) is a long-term debt instrument issued by the Government of the People's Republic of Bangladesh with a maturity period ranging from 2 to 20 years.
2) Why does the Government of Bangladesh issue Treasury Bills and Bonds?
The Government of Bangladesh issues Treasury Bills and Bonds to collect funds for various projects.
3) Who is eligible to invest in Treasury Bills or Bonds?
Any individual aged 18 years or above, as well as institutions such as trust funds, banks, insurance companies, provident funds, gratuity funds, and other entities, are eligible to invest in Treasury Bills or Bonds.
4) Why is there no risk associated with investing in Treasury Bills or Bonds?
Since Treasury Bills and Bonds are debt instruments issued directly by the Government of the People's Republic of Bangladesh, they carry no default risk and are considered completely secure investments.
5) What are the tenure options for Treasury Bills and Bonds?
Treasury Bills are typically available in the following maturities: 91 days, 182 days, and 364 days.
Treasury Bonds are typically available in the following maturities: 2 years, 5 years, 10 years, 15 years, and 20 years.
6) What are the benefits of investing in Treasury Bills and Bonds?
Benefits of Treasury Bills:
Benefits of Treasury Bonds:
7) What is the minimum and maximum investment amount for Treasury Bills or Bonds?
An investor may invest a minimum of BDT 1,00,000 (one lakh taka) and any amount in multiples thereof. There is no upper limit on the investment amount.
8) How are Treasury Bills and Bonds issued?
Treasury Bill auctions are generally held every Sunday, while Treasury Bond auctions are held every Tuesday. These auctions follow a pre-announced auction calendar with specified issue amounts.
9) Is any tax deducted on coupon payments?
Yes, a Source Tax of 15% is deducted at source on coupon payments. Any remaining tax liability, based on your individual tax assessment, must be settled at the time of filing your income tax return.
10) What is the procedure for investing in Treasury Bonds?
There are two methods to invest in Treasury Bonds. First, through the Primary Auction, which is held monthly — you can participate directly to purchase newly issued bonds. Second, through the Secondary Market, where Treasury Bonds are traded regularly — you can buy or sell previously issued bonds through this channel.
11) What is a Primary Auction?
In a Primary Auction, various bidders quote coupon rates, through which the coupon rate of a newly issued bond is determined.
12) Does every investor require a BPID account to invest in Treasury Bills or Bonds?
If you wish to invest through a financial institution, you must open a BPID account. However, you can also invest in Treasury Bills or Bonds conveniently through BRAC EPL Investments Limited without the need for a BPID account.
13) Who is eligible to bid in the auction?
Primary Dealers (PDs) are authorized to place bids in the auction. Other commercial banks, non-bank financial institutions, insurance companies, corporate entities, and individual investors may also participate in the auction through a Primary Dealer (PD).
14) What are the types of bidding?
There are two types of bidding: Competitive Bidding and Non-Competitive Bidding. In Competitive Bidding, participants quote their preferred yield rates (rate of return). In Non-Competitive Bidding, participants do not have this option; instead, they receive bonds at the weighted average yield rate determined by the Competitive Bidders.
15) Is encashment of the bond possible before its maturity?
No, encashment of a Treasury Bond is not possible before its maturity. However, you can sell it in the secondary market. Before selling the bond early, it is necessary to analyze the current market value of your bond compared to the original purchase price to determine any profit or loss.
T-Bill / T-Bond Purchase Process: