Government Bond: Now retail investors can directly deal in government bonds through RBI. Common investors can transact in both primary and secondary markets through the Reserve Bank of India. Reserve Bank Governor Shaktikanta Das has issued this information while issuing the Monetary Policy Review on Friday 5 February. He said that now anyone can open an account with the RBI to make transactions in government bonds. With this decision, India has now been included in the list of countries where common investors deal in government bonds. This is a major structural change.
Risk less, stable return
If seen, investors still deal in government securities. But now they will be able to directly deal in government bonds through RBI. This is a new step. In fact, to increase the stake of retail investors in government bonds, the government and RBI have taken several important steps. It is also included in them only. Explain that government bonds are considered safe for investment. The government issues it, so there is no risk or very little in them. These bonds offer low but stable returns.
What is G-sec?
A government bond is a debt instrument that is traded and traded. The central and state authorities issue them. Central or state governments often require funds. Sometimes liquidity causes a crisis. In such a situation, they issue such bonds to raise money from the market. These are issued for both short and long term.
Short term security is called Treasury Bills which are issued for a period of less than 1 year. If such security is issued for a period of more than one year, it is called a government bond. The central government issues both treasury bills and debt securities. State governments can only issue debt securities. These bonds are issued by the government, so there is no risk in them.
Who does buy and sell now?
Government bonds are bought and sold by mutual funds, PF, insurance companies, commercial banks, primary dealers, co-operative banks, regional rural banks and pension funds. There is a bid to buy and sell simultaneously. In this, foreign portfolio investors (FPIs) have been allowed limited trading. Companies also buy and sell G-Sec.
Is FD a better option
There are many such government bonds, in which the returns for the last 5 years range from 7 to 10 per cent annually. At the same time, there are some 10-year maturity bonds, in which returns of up to 10% per annum have been received. If you choose the right scheme, it can be better than FD in terms of returns. At the same time, there is also a scheme with a maturity of 10 years. If you invest in G-Sec and maintain the investment for more than three years, you can avail income tax by investing through mutual funds.