Government Security: A tradable asset issued by a sovereign government is a government security. It assumes national debt liability. These securities come in two forms Short-term (sometimes called "treasury bills" with an original maturity of less than one year) and long-term (usually called government bonds or fixed-dared securities with an original maturity of one year or more).
Given that it was issued by a sovereign government, investing in it carries zero risk. Since the yield is set by the market, one can obtain an appealing rate of interest. Since these bonds are tradable in the secondary market, one can obtain instant liquidity by selling them in the market.
Major
G-Securities in Bangladesh are:
a.
Treasury Bills (T-Bills)
b. Bangladesh Government Treasury Bond (BGTB).
Government T-bills:
Government treasury bills mature in one year or less. Like zero-coupon bonds,
they do not pay interest prior to maturity, instead, they are sold at a
discount of the par value to create a positive yield to maturity and redeemed
at the face value at maturity. T-bills are commonly issued with maturity dates
of 91 days, 182 days, and 364 days and are tradable in both wholesale and
retail markets. Price is determined by the market. They are issued in scripless
form Weekly (usually on Sunday) auctions of Treasury Bills are held following a
pre-announced auction calendar with a specified amount. Bidders quote their
prices. The Auction Committee determines the cut-off price from the offered
prices.