Government Securities

What is investment in Government Securities (G-Secs)?

  • Government securities are bonds, both short- and long- term, issued by the Government of India to raise funds for their expenditures. The government pays a specified coupon or interest rate on these bonds that may be payable annually or semi-annually or for any other specified frequency. The G-Secs which have a tenure less than a year are called treasury bills. The G-Secs, which mature after a year, are called bonds.

  • G-Secs offer a whole host of advantages as an investment avenue. There is a Sovereign Guarantee. G-Secs are guaranteed by the Government of India. Hence, they carry almost zero credit risk. G-Secs allow you to lock in attractive interest rates for tenures ranging from 91 days to 40 years. Such long-term interest rate assurance is unparalleled because even banks FDs offer a maximum tenure of 10 years.
    • G-Secs have no TDS (Tax Deducted at Source). Like bank FDs, there will be no tax deduction. Thus, you can pay taxes as per your income tax slab at the end of the financial year.
    • G-Secs can be held in demat form, which makes it very convenient for retail investors.
  • In 2017, the RBI notified that stock exchanges could act as aggregators for non-competitive bidding for retail investors to access G-Secs. Retail investors can buy government securities (G-Secs) with a minimum investment of ₹ 10,000. Private sector company platforms, banks and NSE platform including goBid app allow you to invest in G-Secs online. The registration process is simple and can be done online if you have a demat account.

  • For the NSE goBID platform, you must choose your broker with whom you are registered to facilitate this transaction. Your personal details and PAN will also be required. Once bought, the bonds will be stored in your demat account. To buy a G-Sec, look at the bond’s coupon or interest rate. This is what you will get annually. Hold the bond until it matures. At maturity, you will get the face value you paid and any remaining interest payout. If needed, you may exit the investment before its maturity also.

How to invest in G-sec, SDL and T-bill

Retail investors have multiple channels to invest in G-sec, SDL and T-Bill in the primary market. Retail investors can place their orders through any one of the following options available under the non-competitive bidding facility offered by NSE

 

Retail investors registered with NSE trading member

All Resident Individuals

 

Option 1: Through NSE Trading Member

Option 2: Through NSE goBID mobile app/web platform*

Through NSE goBID mobile app/web platform*

Eligible Investors

All eligible investors as permitted by RBI

All eligible investors as permitted by RBI

Only resident individuals

KYC Compliance

If existing active client of NSE trading member, no additional KYC. New investor should complete KYC with NSE trading member

If existing active client of NSE trading member, no additional KYC. New investor should complete KYC and register as client with NSE trading member

No additional KYC if already done through any of SEBI registered intermediary. New investor should complete KYC with any SEBI intermediary

Demat Account

Mandatory

Mandatory

Mandatory

Investor Registration

No additional registration required if already having active account with NSE trading member

One time registration on NSE goBID platform

One time registration on NSE goBID platform

New investor registration on NSE goBID

Not applicable

Investor selects respective trading member at time of registration*

Registration subject to -

Respective trading member has provided valid investor records to Exchange

Successful validation of investor category, demat and bank account with depositories

* Available only if trading member is registered (See Point 1 below) on NSE goBID

Investor can register directly without selecting trading member of NSE

Registration subject to -

Valid KYC details of investor available with SEBI registered KRA including mobile number, email address, investor category

Successful validation of demat and bank account with depositories

Undertaking by investor

Submit to trading member of NSE in format provided by NSE

Accept e-undertaking on NSE goBID and Terms & Conditions

Accept e-undertaking on NSE goBID platform and Terms & Conditions

Order placement

Submit offline or online through mobile app / web platform to the trading member

Submit through NSE goBID mobile app / web platform

Submit through NSE goBID mobile app / web platform

Bid

Only single bid per security in an auction is permitted

Only single bid per security in an auction is permitted

Only single bid per security in an auction is permitted      

Payment and refund of funds

Payment and refund of funds through trading member

Payment and refund of funds through NSE Clearing Ltd. Mandatory to have online banking facility

Funds accepted only from bank account linked to demat account (see point 2 below).

Payment and refund of funds through NSE Clearing Ltd. Mandatory to have online banking facility

Funds accepted only from bank account linked to demat account (see point 2 below).

Credit of Securities

Directly in demat account of investor

Directly in demat account of investor

Directly in demat account of investor

*This facility is not available for SDL.

1. Trading Member Registration on NSE goBID.

  • To register on this portal, trading members should log-in from their existing Admin user of e-IPO platform
  • Then go to 'Misc > NCB Direct Investor' tab and accept terms and conditions
  • Retail investors of only registered trading members will be able to use the mobile app/web-based platforms
  • Registered trading members shall be responsible for bids entered by their investors and also entitled for any incentives circular issued by Exchange/Clearing Corporation from time to time

2. Placing of Bids and Payment of Funds on NSE goBID platform

  • Platform shall display list of securities currently available along with relevant bidding details and price payable
  • For placing bid, investors should select only one security at a time and specify the investment amount in terms of face value. (Minimum Rs.10,000 and multiples thereof, subject to maximum limit specified)
  • Only single bid per security is permitted
  • On submission of a bid, the total amount payable shall be displayed
  • Investors can now proceed to pay online using internet banking or UPI. Investors shall be permitted to make payment using only the bank account linked to the demat account as provided by Depositories. The payment is made through payment gateway from the empaneled banks
  • Securities will be credited to investors demat account and refund if any will be credited to investors bank account as per the timelines specified by the Exchange/Clearing Corporation from time to time
  • Payment status, Mismatch status, Bid status, Refund (if any) shall be made available on the platform
  • In case of cancellation, refund shall be processed by payment gateway 
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