Q.What is a Treasury Bill? Why is it considered the safest money-market instrument?

A Treasury Bill's safety comes directly from who stands behind the promise to repay it.

A Treasury Bill (T-Bill) is a short-term borrowing instrument issued by the Government of India, through the RBI, to meet its temporary cash requirements. T-Bills are issued for standard maturities of 91, 182, or 364 days, and are issued at a discount to their face value — the investor pays less than the face value upfront and receives the full face value back at maturity, the difference being the investor's return. …

Describing a T-Bill as paying periodic interest like a bond — a T-Bill pays no separate interest; the investor's entire return is simply the discount b …