{"id":7374,"date":"2021-08-20T11:21:50","date_gmt":"2021-08-20T11:21:50","guid":{"rendered":"https:\/\/kredx.com\/blog\/?p=7374"},"modified":"2023-10-26T05:51:09","modified_gmt":"2023-10-26T05:51:09","slug":"should-you-invest-in-government-bonds-directly","status":"publish","type":"post","link":"https:\/\/www.kredx.com\/blog\/should-you-invest-in-government-bonds-directly\/","title":{"rendered":"Should You Invest In Government Bonds Directly?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"7374\" class=\"elementor elementor-7374\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-71dcf67c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"71dcf67c\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-efc786d\" data-id=\"efc786d\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-7e736966 elementor-widget elementor-widget-text-editor\" data-id=\"7e736966\" data-element_type=\"widget\" data-settings=\"{&quot;ekit_we_effect_on&quot;:&quot;none&quot;}\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">In February 2021, the Reserve Bank of India announced that it would open up these bonds for small investors under its \u2018RBI Retail Direct\u2019. Thereafter, in July 2021, the RBI released guidelines for the scheme. As a result, retail investors can open a \u2018retail direct guilt\u2019 (RDG) account with RBI in a few simple steps online and start trading in government bonds.<\/span><\/p><p><span style=\"font-weight: 400;\">In addition, the central bank\u2019s online portal will allow institutional investors to access its bond trading platform. Retail investors can also bid for government bonds by way of primary auctions like large institutions do. However, the starting date for this RDG account is yet to be announced by the RBI.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Before the date is announced and you arrive at a decision, let\u2019s understand whether government bonds are suitable for you.\u00a0<\/span><\/p><h2><b>Why Should You Invest In Government Bonds?<\/b><\/h2><p><span style=\"font-weight: 400;\">Government bonds offer numerous advantages to investors, such as the following:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><h3><b>Risk-free<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">Government bonds are perhaps the least risky <a href=\"https:\/\/kredx.com\/blog\/top-short-term-investment-options-with-high-returns\/\" target=\"_blank\" rel=\"noopener\">investment option<\/a> since they are backed by sovereign guarantee. Accordingly, there are minimal chances of investors losing out on their capital.\u00a0<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><h3><b>Returns<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">Usually, rates of returns from these bonds are more or less similar to those from bank deposits. In addition, they offer a guarantee of principal repayment alongside fixed interest pay-outs. Moreover, government bonds are available for a much longer duration, unlike bank deposits.<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><h3><b>Regular Income<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">According to RBI guidelines, interest accrued on these bonds is to be disbursed to bondholders every six months. Resultantly, government bonds allow bondholders to earn regular income.\u00a0<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><h3><b>Portfolio Diversification<\/b><\/h3><\/li><\/ul><p><span style=\"font-weight: 400;\">Government bonds balance the risk of your overall portfolio. Therefore, investment in these securities lets you have a well-diversified investment approach.<\/span><\/p><p><span style=\"font-weight: 400;\">However, government bonds do not offer returns as significant as their corporate counterpart. Investors looking to mop sizeable risk-adjusted gains can browse corporate bond options by signing up with online platforms.<\/span><\/p><p><span style=\"font-weight: 400;\">In case the aforesaid government bond features bode well with you, read on to know how you can invest in the same presently.\u00a0<\/span><\/p><h2><b>How To Invest In Government Bonds?<\/b><\/h2><p><span style=\"font-weight: 400;\">Currently, you can subscribe to government bonds in the following ways:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><b>NSE:<\/b><span style=\"font-weight: 400;\"> If you wish to buy government bonds, you can do so via the online portal of the National Stock Exchange.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Mutual Fund Or ETF:<\/b><span style=\"font-weight: 400;\"> Investors aiming to diversify their portfolio by investing in multiple government bonds can go for gilt funds or ETFs.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Broker:<\/b><span style=\"font-weight: 400;\"> One can also buy bonds online<\/span> <span style=\"font-weight: 400;\">from certified brokers. However, bond prices tend to vary from one broking agent to another.<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">You can also consider investing in corporate bonds through third-party platforms. Plus, given the variety in investment channels, it is now extremely easy for investors to buy bonds online.\u00a0<\/span><\/p><h2><b>How To Invest In Bonds Online?<\/b><\/h2><p><span style=\"font-weight: 400;\">You can invest in bonds via online platforms in the following manner:<\/span><\/p><p><b>Step 1:<\/b><span style=\"font-weight: 400;\"> Log in to the official portal of the preferred online platform.<\/span><\/p><p><b>Step 2:<\/b><span style=\"font-weight: 400;\"> Go to the \u2018Bonds\u2019 tab.<\/span><\/p><p><b>Step 3:<\/b><span style=\"font-weight: 400;\"> Browse through the available bond options. Then, choose a bond that suits you best.<\/span><\/p><p><b>Step 4:<\/b><span style=\"font-weight: 400;\"> Select the number of units you wish to purchase.<\/span><\/p><p><b>Step 5:<\/b><span style=\"font-weight: 400;\"> Select the option \u2018Book Now\u2019.<\/span><\/p><p><span style=\"font-weight: 400;\">With these simple steps, you can invest in bonds<\/span> <span style=\"font-weight: 400;\">by way of an easy and hassle-free procedure. However, as the entire process takes place digitally, you need to visit investment relationship managers in person. Instead, the relationship manager will reach out to you via a phone call and complete your <a href=\"https:\/\/www.kredx.com\/blog\/bonds-the-basics-and-more\/\">bond investment<\/a>.\u00a0<\/span><\/p><h3><b>Bottom Line<\/b><\/h3><p><span style=\"font-weight: 400;\">Investors can soon buy government bonds by opening a retail direct gilt (RDG) account with the Reserve Bank of India. However, one must consider their <a href=\"https:\/\/www.kredx.com\/Invoice-discounting-investment\">investment<\/a> horizon and financial goals before selecting a government bond.\u00a0<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>In February 2021, the Reserve Bank of India announced that it would open up these bonds for small investors under its \u2018RBI Retail Direct\u2019. Thereafter, in July 2021, the RBI released guidelines for the scheme. As a result, retail investors can open a \u2018retail direct guilt\u2019 (RDG) account with RBI in a few simple steps [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7375,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[879],"tags":[882,98,880,535,92,93,76,528,529],"class_list":["post-7374","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bond-investment","tag-bond-investment","tag-bonds","tag-bonds-investment","tag-investing","tag-investment","tag-investment-options","tag-kredx","tag-rbi","tag-reserve-bank-of-india"],"_links":{"self":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/7374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/comments?post=7374"}],"version-history":[{"count":8,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/7374\/revisions"}],"predecessor-version":[{"id":14856,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/7374\/revisions\/14856"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/media\/7375"}],"wp:attachment":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/media?parent=7374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/categories?post=7374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/tags?post=7374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}