How and where to buy government bonds? Learn who is eligible.
Today in this article we will tell you how and where you can invest in government bonds and who is eligible for it?
If you're interested in learning about government bonds or are planning to invest, this news may be important for you. In this article, we'll explain how and where you can invest in government bonds, and who is eligible.
Government bonds are considered a low-risk investment, as the money is lent directly to the Government of India.
What are government bonds?
Government bonds are debt instruments issued by the central government to meet its financial needs. Also known as Government Securities (G-Secs), they pay investors fixed interest and return their principal upon maturity.
Major Types of Government Bonds:
Treasury Bills (T-Bills)
dated government bonds
floating rate bonds
Sovereign Gold Bond
Who can buy government bonds?
Eligibility for investing in government bonds is quite simple. Any Indian citizen, individual investor, senior citizen, HUF, trusts, and companies can invest.
NRI investors are also allowed in some bonds. The minimum investment amount typically starts at ₹10,000, although in some cases, a lower amount is possible.
Where to buy government bonds?
1. RBI Retail Direct platform
The Reserve Bank of India has launched the Retail Direct platform for retail investors. Through this platform, investors can purchase government bonds directly from the RBI. There are no intermediaries, and opening an account is free.
2. Stock Exchanges (NSE and BSE)
Government bonds can also be purchased through the NSE and BSE. Investors must have a demat account and a trading account. They facilitate the buying and selling of bonds in the secondary market.
3. Banks and brokers
Some banks and financial institutions also offer government bonds to their customers, although there may be a service charge or commission.
What are the rules for interest and tax?
Interest on government bonds is typically deposited directly into the investor's bank account once every six months. Interest is taxable according to the income tax slab. If the bond is sold before maturity, capital gains tax may apply. For Sovereign Gold Bonds, capital gains tax is not applicable upon maturity.
Which investors are better suited for government bonds?
Government bonds are ideal for investors seeking safe and stable returns. They can be a good option for senior citizens, retirees, and investors with long-term investment plans.
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