---
title: "Why is the allotment value for my T-bill purchase lesser than the face value of ₹100?"
description: "Your T-bill allotment value is lesser because T-bills are issued at a discount to their face value and redeemed at full value upon maturity."
category: arrow
subcategory: general
slug: why-is-the-allotment-value-for-my-t-bill-purchase-lesser-than-the-face-value-of-
canonical: https://support.arrow.trade/arrow/general/why-is-the-allotment-value-for-my-t-bill-purchase-lesser-than-the-face-value-of-/
---

# Why is the allotment value for my T-bill purchase lesser than the face value of ₹100?

> Your T-bill allotment value is lesser because T-bills are issued at a discount to their face value and redeemed at full value upon maturity.

## Short answer

Your T-bill allotment value is lesser because T-bills are issued at a discount to their face value and redeemed at full value upon maturity.

## How T-bills work

T-bills do not carry an interest component, which is one of the biggest differences between T-bills and bonds. Instead, T-bills generate returns through the discount pricing mechanism.

## Example

The face value (also called par value) is ₹100. This T-bill is issued at a discount to its par value, say ₹97. After 91 days, you will receive ₹100, earning a return of ₹3.

This discount structure explains why your allotment value on Arrow appears lesser than the par value of ₹10,000 (or multiples of ₹10,000).

## Related

- Browse more in [general](/arrow/general/)
- Open account: [kyc.arrow.trade](https://kyc.arrow.trade)
- Trade on Arrow: [app.arrow.trade](https://app.arrow.trade)
- Support: [support@arrow.trade](mailto:support@arrow.trade)

---

Source: https://support.arrow.trade/arrow/general/why-is-the-allotment-value-for-my-t-bill-purchase-lesser-than-the-face-value-of-/
Publisher: Arrow / iRage Broking Services LLP