Treasure bill

But @Siddarth tell me, don't their absolute liquidity and lack of market price volatility make them superior to longer-term bonds for income investors who might need to access capital quickly without incurring losses?

Yes, through RBI Retail Direct and NSE goBID, you can directly invest in Treasury Bills. These platforms are very easy to use, and you can access them online. The minimum investment amount is ₹10,000.

T-bills are government debt for under a year, sold cheaper than their value, with no regular interest. Long-term government bonds mature after a year and provide periodic interest payments. Typically, longer bonds offer higher returns due to increased risk over time.

Choosing between them depends on your needs. T-bills are safe for short-term savings. Long-term bonds suit those wanting regular income over a longer period while accepting more potential risk.

With the increase in the repo rate, there will eventually be an increase in T-bill yields. With this, investors get higher returns on investments. So its very important to consider the general economic situation and future interest rates in the coming years. The interest rate will continue to rise in the future. So locking in your investment is a good move.