The minimum investment in G-Secs is Rs 10,000 and certificates are issued in denominations of Rs 100 each. They have fixed maturity and fixed coupon rates payable half yearly and are identified by their year of maturity. 12.50 per cent GOI 2007 is a G-sec carrying a coupon of 12.50 per cent and maturing in 2007. There may also be a cap and a floor rate attached, thereby fixing a maximum and minimum interest rate payable on it. They are bonds where the interest rate is a fixed percentage over the wholesale price index.
Redemption is linked to the wholesale price index.
The difference is that T-Bills are issued to meet the short term borrowing programme of the government. They do not carry a coupon rate but are issued at a discount and redeemed at par. T-Bills are issued for a period of less than one year. Minimum investment required in case of T-Bills is Rs 25,000. The primary market caters to the needs of banks, financial institutions, provident funds, insurance, pension funds and primary dealers.