Where to Buy Government Bonds in India?
In November 2021, India opened its $1.1 trillion sovereign bond market to retail investors by launching the 'RBI Retail Direct Scheme'. The government took this step to widen retail participation to fund its massive borrowing program. According to the Union Budget, the central government is planning to borrow Rs. 14.95 lakh crore through the sale of government securities on a gross basis in 2022-23 (April-March), which is a massive amount. Earlier it was challenging for retail investors to buy government bonds; Indian government bond market was predominantly available to institutional investors, like insurance companies, mutual funds, pension funds, etc. However, with the advent of various online platforms like BondsIndia, from where you can invest in different types of bonds such as tax-free bonds, zero coupon bonds, corporate bonds, convertible bonds etc., retail participation has increased drastically.
Read also- Top 5 safe investments with stable returns in India and Is now a good time to buy bonds online How to purchase government securities in India? What are government bonds in India? Government bonds/securities are financial instruments issued by the central or the state government of a country for their expenditures. In India, the Reserve Bank of India (RBI) issues government bonds in the primary market through an auction. Earlier, investors could only apply through competitive bidding.
Since institutional investors had large volumes, retail investors had a fewer chance of getting the bid. To encourage retail participation, the non-competitive bidding scheme was introduced by the RBI in November 2017. If individuals want to buy government securities in India, they can choose any one of the platforms: Know- how to invest in fixed income securities 1. Direct Participation If individuals want to participate in government bonds directly, they can open a trading and Demat account with a bank. They have to get registered with a stock exchange for the bids. Or they can look for a stockbroker to participate through noncompetitive bidding. Read More- Why to Invest in Higher Rated Bonds Like AAA, AA+ or A in India 2. NSE and BSE Apps Retail investors can also participate through the mobile app or a web-based app of NSE (National Stock Exchange) or BSE (Bombay Stock Exchange). Check out- Which are the best bonds to invest in India The NSE app is known as "NSE goBID", and the BSE app is known as BSE Direct.
Through these apps, individuals can easily buy government bonds. 3. Online Platforms Nowadays, many online bonds platforms allow individuals to participate in government bonds. One such online platform is BondsIndia. If you want to buy government bonds online through BondsIndia, click here. 4. RBI Retail Direct Scheme Recently, the RBI launched the RBI Retail Direct Scheme. In this scheme, one can invest directly in the primary and secondary government's bond market. For that, they will have to open a gilt account with the national banks. The government securities and treasury bills will be digitally stored in the gilt account. 5. Gilt Funds One of the most common ways of investing in government securities is through gilt funds. They are debt mutual funds, where the investment in government securities is at least 80%.
Conclusion
There are numerous reasons why investing in government bonds can be a smart move for investors. As the government issues government bonds, they carry a sovereign guarantee. They tend to provide relatively stable returns, which can be appealing to investors looking for stability in their portfolios. Buying government bonds will also help individuals in diversifying their portfolios. And finally, some people might simply prefer to invest in something backed by the government rather than risk their money in the stock market or other types of bonds investments. Also Readhow to buy beneficial early retirement pension plans online, what are tax saving bonds its benefits and how to invest and tax free bonds for senior citizens