For years, treasury bills and fixed deposits have been the two most familiar investment options for Ghanaians looking to earn more than a basic savings account offers. They are often spoken about in the same breath, pitched as “safe” choices, and recommended to first-time investors who want to avoid risk.
But in today’s Ghanaian economic climate — shaped by inflation, tight liquidity, changing interest rates and lingering trust issues after recent financial sector crises — choosing between treasury bills and fixed deposits is no longer a simple decision.
Both have strengths. Both have limitations. And which one is “better” depends largely on what an investor is trying to achieve.
Understanding the two options in plain terms
Treasury bills are short-term government securities. When you buy a T-bill, you are lending money to the Government of Ghana for a fixed period, usually 91 days, 182 days or 364 days. At maturity, the government pays you back with interest.
Fixed deposits, on the other hand, are agreements between you and a bank or financial institution. You deposit a lump sum for a fixed period — typically three months, six months or one year — and the bank pays you interest at an agreed rate.
At first glance, both appear similar. In reality, they serve slightly different purposes.
Safety and risk: who are you really trusting?
Treasury bills are backed by the Government of Ghana. This makes them one of the safest instruments available in the local market. While government finances may be under pressure, T-bills remain the benchmark for low-risk investing and are central to the country’s financial system.
Fixed deposits depend on the strength of the issuing bank or financial institution. While Ghana’s banking sector has been cleaned up significantly since the financial sector reforms, fixed deposits still carry institution-specific risk. If a bank fails, access to your money may be delayed, even if deposits are eventually protected.
For risk-averse investors, especially after the banking sector clean-up, treasury bills often feel psychologically safer.
Returns: which pays more in practice?
In theory, fixed deposits sometimes advertise higher interest rates than treasury bills. In practice, the difference is often narrower than it appears.
Treasury bill rates are driven by government borrowing needs and broader economic conditions. In high-interest environments, T-bill yields can be quite attractive and often outperform fixed deposits offered by commercial banks.
Fixed deposit rates are influenced by T-bill rates but adjusted by banks based on their funding needs and profit margins. While some institutions offer competitive rates to attract deposits, others pay significantly less.
Another key difference lies in transparency. Treasury bill rates are publicly known and fairly uniform across the market. Fixed deposit rates vary widely from bank to bank and often depend on negotiation power, deposit size and existing relationships.
Liquidity and access to your money
Liquidity is where treasury bills and fixed deposits begin to diverge meaningfully.
Treasury bills are generally held until maturity, but they can be sold before maturity if necessary, sometimes at a discount. This makes them moderately flexible, though not ideal for sudden cash needs.
Fixed deposits are more rigid. Breaking a fixed deposit early usually attracts penalties, reduced interest or, in some cases, complete forfeiture of interest earned. For investors who may need funds unexpectedly, this can be a significant drawback.
In uncertain economic times, liquidity matters more than many people realise.
Inflation: the silent factor
One of the biggest challenges facing both treasury bills and fixed deposits today is inflation. When inflation is high, an investment can show positive returns on paper but still lose purchasing power in real terms.
Treasury bills tend to adjust more quickly to inflationary pressures because government borrowing rates respond faster to economic conditions. Fixed deposit rates often lag behind, especially for smaller depositors.
In periods of rising inflation, treasury bills are more likely to keep pace than fixed deposits, even if neither fully beats inflation.
Minimum investment and accessibility
Treasury bills typically have a higher entry point, though this has been reducing over time through banks and digital platforms. They also require a bit more understanding, especially for first-time investors.
Fixed deposits are straightforward and familiar. Many banks allow customers to open fixed deposits with relatively modest amounts, making them accessible to a wider range of people.
For someone who values simplicity and already banks with a particular institution, fixed deposits can feel more convenient.
Trust and perception after recent financial shocks
Recent financial sector disruptions have reshaped how Ghanaians think about safety. Many investors who once relied on savings and fixed deposits now prefer instruments perceived as directly linked to government guarantees.
This shift has boosted interest in treasury bills, especially among individuals who want minimal exposure to institutional risk.
Trust, not just returns, has become a decisive factor.
So which is better — treasury bills or fixed deposits?
There is no universal answer.
Treasury bills tend to be better if:
- You prioritise safety and transparency
- You want predictable, market-driven returns
- You are investing surplus funds you can lock away for a defined period
- You want protection against institutional risk
Fixed deposits tend to work better if:
- You value simplicity and convenience
- You are comfortable with your bank’s stability
- You want a fixed, guaranteed return without monitoring market rates
- You are investing smaller sums or maintaining a banking relationship
A more realistic approach: not either-or
For many Ghanaians, the smartest strategy is not choosing one over the other, but understanding how each fits into a broader financial plan.
Fixed deposits can work well for short-term cash management within a trusted bank. Treasury bills are often better for preserving value and building disciplined investment habits.
In an economy still recovering from shocks and adjusting to inflation, informed choice matters more than blind loyalty to any one product.
The real question is not which instrument is better in absolute terms, but which one aligns with your goals, your risk tolerance and your need for access to cash.
In today’s Ghana, that clarity may be the most valuable return of all.
