What Are Treasury Bills?
Treasury Bills are debt securities. The Central Bank of Sri Lanka issues them. They act for the Sri Lankan Government. These bills follow the Local Treasury Bills Ordinance of 1923.
T-bills are zero-coupon securities. They sell at a discount. The difference is your interest gain. You buy them for less than their face value.
They have different time periods. You can choose 91-day bills. There are also 182-day bills. The longest tenure is 364-day bills.
Settlement is fully electronic. It uses the LankaSecure system. This system is from the Central Bank. You can trade T-bills easily.
A secondary market exists for T-bills. Primary dealers help with trading. This offers intraday liquidity. You can sell before maturity.
Interest earnings are tax-exempt. No withholding tax applies. Normal income tax may apply. Check your tax situation.
Who Offers Treasury Bill Services?
Many institutions offer T-bill services. They are approved by the Central Bank. These include Primary Dealers. Selected financial institutions also help.
State-Owned Banks offer these services. Bank of Ceylon is one example. Peoples Bank also helps investors. They provide access to T-bills.
Private Commercial Banks also participate. Commercial Bank of Ceylon is a provider. Hatton National Bank offers T-bills. Sampath Bank and Seylan Bank are options. Nations Trust Bank also helps investors.
Development Finance Institutions offer services. DFCC Bank is one such institution. NDB Bank also provides T-bill access. Licensed Primary Dealers specialize in this area.
WealthTrust Securities is a primary dealer. First Capital Treasuries helps investors. CAL (Capital Alliance) is another dealer. Asia Securities and JB Securities are also available. Perpetual Treasuries offers T-bill services.
Specialized Fund Managers also assist. National Savings Bank Fund Management Company is an example. They help manage T-bill investments. You choose your preferred provider.
Who Can Invest in Treasury Bills?
Individuals can invest in T-bills. Sri Lankan residents are eligible. Non-resident Sri Lankans can also invest. Foreign nationals are welcome to participate.
Corporate Entities can also buy T-bills. Local incorporated companies are eligible. Foreign incorporated companies can invest. Mutual funds are allowed to buy. Country funds and regional funds can also invest.
Other authorized investors can participate. Executors of estates may invest. Liquidators can also buy T-bills. The Central Bank issues directives for other investors.
The minimum investment is LKR 10,000. This is based on face value. You can invest in multiples of LKR 10,000. This makes T-bills accessible.
You can apply through primary auctions. Your chosen provider helps with bids. They use their branch or electronic portal. This makes applying simple.
Bids can be competitive. You specify your desired yield. Non-competitive bids are also possible. These accept the average auction yield.
Treasury Bill Rates and Fees
T-bill rates change weekly. They depend on Central Bank auctions. Providers also charge fees for their services. You should compare these costs.
Here is a comparison of some providers:
| Provider | 91-Day Yield (Bid/Offer) | 182-Day Yield (Bid/Offer) | 364-Day Yield (Bid/Offer) | Primary Auction Fee |
|---|---|---|---|---|
| WealthTrust Securities | 7.65% / 7.50% | 7.90% / 7.80% | 8.10% / 8.00% | LKR 5,000 per successful bid |
| First Capital Treasuries | 8.00% / 7.70% | 8.20% / 8.00% | 8.70% / 8.50% | Negotiable; typically LKR 3,000-5,000 |
| Bank of Ceylon | Indicative; aligned with CBSL rates | Standard service charges apply | ||
| CAL Online | Real-time competitive rates; portal-based | Digital subscription fee (if applicable) |
WealthTrust Securities offers 7.65% for 91-day bids. Their 182-day yield is 7.90%. The 364-day yield is 8.10%. They charge LKR 5,000 per successful bid.
First Capital Treasuries offers 8.00% for 91-day bids. Their 182-day yield is 8.20%. The 364-day yield is 8.70%. Their fee is usually LKR 3,000 to LKR 5,000.
Bank of Ceylon rates align with CBSL. They charge standard service fees. CAL Online provides real-time rates. They may have a digital subscription fee. Rates depend on weekly Central Bank auctions.
How to Invest: A Step-by-Step Guide
First, choose a suitable provider. Look at their rates and fees. Check for digital access options. Consider their customer support.
Next, open an investment account. You must complete KYC. This includes your identity checks. You also sign a customer agreement for securities.
Then, gather all required documents. This step is very important. Section 6 lists all necessary papers. Prepare them carefully beforehand.
Submit your bid application. Fill out the auction form. Specify your chosen tenor. State the face value you want. You can choose a competitive yield. Or you can select non-competitive.
Submit your bid by the Central Bank deadline. This is usually 12 p.m. on auction day. Your provider will process it. Ensure timely submission.
Fund settlement follows. Funds are debited from your account. This happens on the settlement date. Make sure you have enough money.
You receive an allotment advice. This confirms your investment. Your holdings appear in LankaSecure. This system tracks your T-bills.
You can hold T-bills to maturity. You then receive the full face value. Or you can sell them early. Use the secondary market through your provider.
Required Documents and Procedures
Individual investors need specific documents. You need a filled T-Bill application form. A customer agreement is also required. Provide two signed copies of this agreement.
You must show identity proof. A copy of your National ID works. A valid Passport is also accepted. A Driving License copy is fine. Provide address proof if different from ID.
Corporate investors need more documents. A Board resolution is needed. It must authorize the investment. Provide the Certificate of Incorporation. A list of authorized signatories is also required.
Corporate KYC documents are essential. A corporate customer agreement is needed. All documents are carefully verified. This follows Anti-Money Laundering guidelines. Central Bank guidelines are also followed.
Benefits and Risks of Treasury Bills
Treasury bills offer many benefits. They are default-free. The government guarantees them. This makes them very safe investments.
They offer high liquidity. Weekly auctions ensure this. An active secondary market exists. You can access your money easily.
T-bills are tax-efficient. Interest earnings have no withholding tax. This helps maximize your returns. They are benchmark rates.
T-bill rates inform money-market yields. This helps guide other investments. They are a stable part of the market. Consider these benefits.
However, risks exist. Interest-rate risk is one concern. Secondary market prices change. They move with yield changes.
Reinvestment risk is another factor. Future rates may be lower. This can happen at rollover. Inflation can also be a risk.
Real returns may decrease. This occurs during high inflation. Operational risks can also happen. Late submissions can lead to missed bids. Documentation errors are also a risk.
Current Market Overview
Auctions happen every week. Treasury bills are auctioned on Wednesdays. Treasury bonds are auctioned fortnightly. This keeps the market active.
Market yields vary by tenor. For 91-day bills, yields are around 7.60%. 182-day bills yield about 7.90%. 364-day bills offer around 8.05% (August 2025 data).
Regulatory changes are in place. KYC norms are now stronger. Digital bidding platforms are common. Non-resident access is also extended. This supports the open economy measures.
A trend of yield compression is noted. This happens as inflation moderates. Retail participation is growing. Online portals help this growth.
Smart Investment Tips
Diversify your tenors. Stagger your maturities. This helps manage reinvestment risk. It spreads out your exposure.
Use competitive bidding. Do this if you are confident. You can secure slightly better rates. This helps optimize returns.
Monitor the secondary market. Sell your holdings opportunistically. Do this when yields fall. You can gain more from your sale.
Leverage digital platforms. They offer faster submission. You get real-time rate visibility. This makes investing easier.
Stay informed about the market. Regularly review CBSL press releases. Check weekly auction results. This helps you make smart choices.
Solving Common Problems
Investors can face various problems. Knowing solutions helps. This guides you to confident investment. You can navigate challenges easily.
| Problem | Solution |
|---|---|
| Late bid submission | Set calendar reminders. Use providers online portal for auto-submission. |
| Incomplete documentation | Refer to providers checklist in advance. Conduct an internal KYC audit before applying. |
| Misunderstanding Discount Yield | Use bid calculators. Seek provider guidance on yield-to-price conversions. |
| Secondary market illiquidity | Choose high-volume tenors (91-day). Select reputable primary dealers. |
| Reinvestment at lower rates | Maintain laddered portfolio. This balances yields across maturities. |
For late bid submission, set reminders. Use your provider's online portal. It can help with auto-submission. This avoids missing deadlines.
If documentation is incomplete, check lists. Refer to your provider's checklist early. Do an internal KYC audit. This ensures all papers are ready.
To understand discount yield, use calculators. Seek guidance from your provider. They can explain yield-to-price conversions. This clarifies your earnings.
For secondary market illiquidity, choose wisely. Select high-volume tenors like 91-day. Use reputable primary dealers. This ensures better liquidity.
To avoid lower reinvestment rates, ladder your portfolio. This spreads investments across maturities. It balances your yields. This helps manage future rate changes.