Sign In
By signing in or creating an account, you agree with Associated Broadcasting Company's Terms & Conditions and Privacy Policy.
By signing in or creating an account, you agree with Associated Broadcasting Company's Terms & Conditions and Privacy Policy.
Kolkata: Just like companies, the government, too, needs to raise money. They need to raise money even after getting tax revenues and resort to raising debts. Governments often issue bonds to raise money. Bonds carry fixed of floating returns. Many governments float bonds to raise capital for long-term requirements such as infrastructure building.
Financial institutions such as banks and insurance companies have been investing in government debt for decades. However, improvements in investment technology are gradually paving the way for retail participation in such government debt paper. The optimum way is to try it through the retail investment wing of Reserve Bank of India called RBI Retail Direct. Let's have a look at the steps involved.
ONE: Retail Direct Gilt (RDG) account must be opened on rbiretaildirect.org.in. It comes free
TWO: KYC has to be done to register on RBI Retail Direct. Other platforms such as BSE Direct or NSE goBID.
THREE: Bank account has to be linked after logging in after registration with the platform is complete. The bank account has to be linked for paying for bonds/government securities.
FOUR: To choose one has to carefully read the list of open government bond auctions or bond offerings. There is both a primary market and a secondary market for government debt paper.. One can visit HDFC Securities, ICICI Direct, Upstox, Groww, Axis Direct or Zerodha for purchase/transaction in the secondary market
FIVE: Before placing purchase order, one has to select the bond to be bought, its maturity period and decide on the investment amount. One can purchase straightaway from the secondary market, while in the primary market, one has to place bids during auction and wait.
SIX: The payment can be done by net banking through the account linked with the platform. The UPI mode can be used too. These apply for the second market purchases but for the primary market one has to wait till allotment is done. If one is not allotted, the amount is returned (process similar to investment in IPO).
SEVEN: Bonds paid for credited to the account. In the primary market, allotment takes place in RDG account (if you have opened an account there) or to the demat account if you are using a broker platform (of the sort mentioned above).
