How to Invest in Indian Government Securities
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- Government of India issues Treasury Bills and Government Bonds through the RBI to raise funds, with maturities ranging from under one year to 40 years.
- Reserve Bank of India (RBI) enables retail investors to invest directly via the free Retail Direct Gilt (RDG) account, allowing participation in primary auctions and secondary market trading.
- Retail investors can invest in G-Secs with a minimum of ₹10,000, either directly, through demat accounts on stock exchanges, or indirectly via gilt mutual funds.
- FIIs and FPIs are exempted from taxes on capital gains and interest income from government securities, a move that has increased market attention on G-Secs.
Why it matters: Retail investors gain low-risk exposure to sovereign debt with ₹10,000 minimum entry, while the FII/FPI tax exemption may increase market liquidity and influence yield trends. This opens a previously institutional-dominated market to wider participation.
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