How to buy T-bills and PIBs in Pakistan: the IPS account guide.

Straight to it: You buy Government of Pakistan T-bills and PIBs directly by opening an IPS account at a commercial bank and bidding in SBP auctions; for smaller amounts, a money market fund holds largely the same T-bills from around Rs. 1,000.

Every few weeks the Government of Pakistan borrows hundreds of billions of rupees, auctioning Treasury bills and Pakistan Investment Bonds through the State Bank. Banks, mutual funds and insurance companies park enormous sums in these instruments and earn the "risk-free" yield. Your bank passes you only a fraction of it. What most retail investors never realise is that you can buy these exact securities yourself, through an IPS account at an ordinary commercial bank. This guide walks through what T-bills and PIBs are, how the auctions work, how to open an IPS account, the taxes, and when to skip the whole exercise and use a money market fund instead.

01What are T-bills and PIBs?

Market Treasury Bills (T-bills) are short-term government debt, issued in 3-month, 6-month and 12-month tenors. They are zero-coupon instruments sold at a discount to face value. You might pay roughly Rs. 97,200 today for a bill that repays Rs. 100,000 in three months, and that gap, annualised, is the quoted yield. Short maturity plus a federal-government issuer makes T-bills the closest thing to a pure "risk-free rate" in the rupee market.

Pakistan Investment Bonds (PIBs) are the long-term sibling, running from 2 to 30 years. They come in two main flavours. Fixed-rate PIBs pay a coupon set at auction every six months until maturity. Floating-rate PIBs reset their coupon periodically against a short-term benchmark. A fixed-rate PIB freezes today's yield for a decade. A floater stays aligned with wherever rates go next.

Both are direct obligations of the Government of Pakistan, issued and settled through the State Bank. In rupee terms there is no stronger credit: the government that prints the currency is the borrower. They are not risk-free in every sense (inflation and reinvestment risk come up below), but default risk on rupee government paper is as low as it gets in Pakistan.

02How yields track the SBP policy rate

Yields are discovered at auction, but they orbit one number: the SBP policy rate, currently 11.5% and holding as of June 2026. Short T-bill yields rarely stray far from it. The SBP publishes cut-off yields for every auction on sbp.org.pk, and that is the best free signal of where the market thinks rates are heading. When 12-month bills clear below the policy rate, cuts are priced in. Above it, hikes.

This matters a lot for which tenor you choose. Pakistan has just been through a historic cutting cycle, from 22% in 2023 down to 11.5% today. Anyone rolling 3-month T-bills watched their reinvestment yield shrink at every maturity. Anyone who locked a long fixed-rate PIB near the peak is still collecting coupons set in a 20%+ world. The lesson:

• If you expect further cuts: longer fixed-rate paper locks today's yield before it disappears. With CPI inflation at 7.0%, an 11%+ nominal lock-in is a meaningfully positive real return.
• If you expect hikes or are unsure: stay short (3-month bills) or use floating-rate PIBs, so your money reprices upward quickly.
• If you may need the money soon: stay short regardless - long PIBs sold early can trade below what you paid.

With the SBP pausing after 1,050 basis points of cuts, the 2026 debate is whether more easing is coming. If it is, the window to lock double-digit government yields is closing. That is the same logic we cover in our SBP policy rate guide.

03What is an IPS account?

Government securities in Pakistan are scripless and book-entry. There is no paper certificate. Institutions hold them at the SBP; retail investors hold them through an Investor Portfolio of Securities (IPS) account at a commercial bank. The bank acts as custodian. Securities are recorded in your name, segregated from the bank's own holdings. This is the part that matters: your T-bills are your property, not a deposit liability, so they do not depend on the bank's solvency.

Most large commercial banks offer IPS accounts. HBL, UBL, Standard Chartered and Bank Alfalah are commonly cited examples. Meezan Bank offers the equivalent for Shariah-compliant Government Ijara Sukuk rather than conventional interest-bearing bills. Availability, minimums and fees vary, so ask your own bank first.

Opening requirements are similar everywhere:

• Your CNIC (and NTN if you have one, for filer withholding treatment)
• An existing bank account at the same bank, to settle purchases and receive proceeds
• The bank's IPS account opening form and terms acknowledgement
• FATCA/CRS self-certification forms (standard tax-residency declarations all banks now require)
• Sometimes a brief source-of-funds declaration for larger amounts

Account opening is usually free or nominal, but many banks levy small custody or transaction fees on IPS holdings. Get the fee schedule in writing. On small balances, those fees quietly eat a noticeable slice of your yield.

04Primary auctions vs the secondary market

There are two ways to acquire government securities, and your bank handles both through the same IPS account.

1. Primary auctions (via your bank as agent)

The SBP runs auctions on a published calendar. T-bill auctions are typically fortnightly, PIB auctions roughly monthly, and the schedule and results sit on sbp.org.pk. Only designated Primary Dealer banks bid directly; your bank submits your bid as your agent. Retail investors almost always use a non-competitive bid. You specify the amount and tenor, not the yield, and receive securities at the weighted-average yield of accepted competitive bids. No risk of mispricing your own bid.

2. Secondary market purchase

Banks also sell securities from their own books or source them in the interbank market. This is handy when you want a specific maturity date or want to buy between auctions. The price reflects current market yields, so an older high-coupon PIB costs more than face value when rates have fallen. Secondary pricing is less transparent, so compare the implied yield your bank quotes against recent auction cut-offs before you agree.

05Step-by-step: opening an IPS account and placing your first bid

1. Pick the bank where you already hold an account. The settlement account usually has to be at the same bank. Call ahead, because not every branch handles IPS requests.
2. Ask for the IPS account opening pack. Complete the form, attach your CNIC copy and sign the FATCA/CRS self-certification. Mention if you are a filer. Your Active Taxpayer List status sets your withholding rate.
3. Confirm minimums and fees in writing. Banks set their own minimum bid sizes (often Rs. 100,000 or more) and may charge custody or transaction fees.
4. Wait for activation. Usually a few working days. You then receive an IPS account number linked to your bank account.
5. Check the auction calendar. Find the next auction date on sbp.org.pk and review recent cut-off yields.
6. Submit your instruction before the bank's cut-off. Banks need your non-competitive bid one or more working days before the auction. Specify the instrument (say, a 6-month T-bill) and the face-value amount, with funds sitting in your settlement account.
7. Settlement. Your account is debited the discounted price, the securities land in your IPS account, and you get a confirmation showing your yield.
8. At maturity, roll or exit. Face value comes back to your bank account automatically. To stay invested, instruct a new bid. Many investors set a standing rollover instruction.

06T-bills vs National Savings vs money market funds

Buying securities directly is not the only way to earn the government yield, and for most readers it is not the best way:

Here is the part many guides skip: a money market mutual fund is, in substance, a T-bill portfolio with a Rs. 1,000 entry ticket. These funds invest mostly in the same short-term government paper, publish daily NAVs and yields through mufap.com.pk, and redeem within a day or two. You pay a small management fee and in return get diversification, no auction paperwork and near-instant access. For someone deploying Rs. 50,000 or Rs. 500,000, that trade is almost always worth it. Direct IPS ownership earns its keep when the amount is large enough that fund fees outweigh the convenience, or when you want to pin down a multi-year fixed-rate PIB before rates fall further. For locked-in rates at small ticket sizes, National Savings is still compelling. Meezan Islamic Income, for context, returned 8.4% over the year to mid-2026, a useful benchmark for the low-volatility income bucket these instruments compete in. Current rates are at savings.gov.pk, compared head-to-head in our National Savings vs mutual funds guide.

07Taxes on T-bill and PIB profit

Returns on government securities are taxed as profit on debt under the Income Tax Ordinance. Your bank deducts withholding tax at source, so the amount hitting your account is already net of tax. Two things to keep in mind:

• Filer status matters, a lot. Withholding rates for people not on the FBR's Active Taxpayer List are substantially higher. If you invest meaningful amounts and are not a filer, becoming one is usually the highest-return "investment" you can make.
• Rates change with federal budgets. We deliberately do not print percentages here, because they get revised in finance acts and depend on your circumstances. Check the current schedule on fbr.gov.pk or confirm with your bank or a tax adviser.

Capital gains on securities sold before maturity are taxable too, under different treatment. Keep your bank's transaction confirmations for return-filing time.

08The risks: what can actually go wrong

Reinvestment risk

This is the defining risk of short paper in a cutting cycle. A 3-month T-bill bought today near 11.5% matures in September. If the SBP has cut by then, you reinvest at less. Rolling short bills from 2023 onward meant repricing down from 22% toward 11.5%, which roughly halved the income on the same capital. For dependable long-term income, fixed-rate PIBs or locked CDNS certificates solve exactly this problem.

Price risk on PIBs sold before maturity

A fixed-rate PIB held to maturity pays its face value, full stop. Sold early, it fetches whatever the market will pay. When yields rise, prices of existing fixed-rate bonds fall, and longer maturities swing the hardest. Anyone who bought 10-year PIBs in 2021 at single-digit coupons and needed cash in 2023, with the policy rate at 22%, took painful losses. Only commit to long tenors with money you will not need early. Floating-rate PIBs sidestep most of this risk.

Inflation risk

Government paper protects your rupees, not your purchasing power. Today the math is favourable. An 11.5% nominal anchor against 7.0% CPI inflation works out to roughly +4.5% real. But in 2022 and 2023, inflation ran far above even a 22% policy rate for long stretches, and "risk-free" savers lost real value every month. A locked 10-year coupon that looks generous today could look thin if inflation picks up again. That is the core argument for holding some real assets such as equities, which we discuss in our mutual fund investing guide.

09Frequently asked questions

What is the minimum amount needed to buy T-bills in Pakistan?

Banks set their own practical minimums for IPS customers - commonly Rs. 100,000 or more per bid, and some expect substantially larger amounts. Ask your branch for its current minimum before opening the account. If your investable amount is below that threshold, a money market mutual fund gives you the same T-bill exposure from around Rs. 1,000.

Are T-bills safer than National Savings certificates?

Both are direct obligations of the Government of Pakistan, so the credit risk is essentially the same. The differences are practical: T-bills are tradable market instruments held in an IPS account, while National Savings certificates are non-tradable CDNS products with their own early-encashment rules. Neither protects you from inflation eroding real returns.

Can I sell my T-bills or PIBs before maturity?

Yes - through your bank in the secondary market. T-bills are short-dated, so their prices move little. PIBs are different: if rates have risen since you bought, a fixed-rate PIB will be worth less than you paid; if rates have fallen, you may sell at a gain. Held to maturity, you receive full face value regardless.

Do I pay tax on T-bill and PIB profit?

Yes. Profit is treated as profit on debt and withholding tax is deducted at source by your bank - at a significantly higher rate if you are not on the FBR's Active Taxpayer List. Capital gains on early sales are also taxable. Rates change with federal budgets, so verify the current schedule at fbr.gov.pk rather than relying on any fixed figure.

Should I buy T-bills directly or just use a money market fund?

For most retail investors with less than a few million rupees, a money market fund is more practical: it holds largely the same T-bills, accepts around Rs. 1,000, redeems in one or two working days, and needs no auction paperwork. Direct IPS ownership makes sense for larger amounts, avoiding fund fees, or locking a specific PIB maturity and coupon before an expected rate-cutting cycle.

What is an IPS account and how do I open one?

An Investor Portfolio Securities (IPS) account is the record-keeping account a bank maintains with the State Bank of Pakistan to hold your government securities such as T-bills and PIBs. You open one through a commercial bank that offers the service, usually by submitting standard KYC documents like your CNIC and an existing bank account. Eligibility, fees, and paperwork vary by bank, so confirm the exact requirements with your branch.

What tenors are available for T-bills in Pakistan?

Treasury bills are short-term instruments, typically issued in three-month, six-month, and twelve-month tenors. They are sold at a discount to face value and pay no separate coupon - your return is the difference between the purchase price and the face value received at maturity. For longer fixed-income exposure, Pakistan Investment Bonds (PIBs) run for several years instead.

Can overseas Pakistanis buy T-bills?

Non-resident Pakistanis can generally invest in government securities, often through Roshan Digital Accounts or non-resident accounts offered by Pakistani banks, which channel funds into the relevant instruments. The specific products, currency options, and tax treatment differ from those for resident investors. Check the current terms with a participating bank and verify tax details on fbr.gov.pk.

How are T-bill auctions conducted in Pakistan?

The State Bank of Pakistan holds periodic auctions on behalf of the government, where banks and primary dealers submit competitive bids. The cut-off yield is set by the accepted bids, and retail investors usually participate indirectly by placing orders through their bank rather than bidding at the auction themselves. Auction calendars and results are published by the State Bank, so check sbp.org.pk for the current schedule.

What is the difference between T-bills and a bank fixed deposit?

A T-bill is a direct obligation of the Government of Pakistan, while a fixed deposit is a liability of the bank that holds it. T-bills are tradable in the secondary market and held in an IPS account, whereas a fixed deposit is held with the bank and typically has its own early-withdrawal penalties. Both have their profit taxed as profit on debt, so verify the applicable withholding rates on fbr.gov.pk.