{"id":7402,"date":"2021-09-02T11:26:27","date_gmt":"2021-09-02T11:26:27","guid":{"rendered":"https:\/\/kredx.com\/blog\/?p=7402"},"modified":"2024-01-25T09:12:23","modified_gmt":"2024-01-25T09:12:23","slug":"rbi-brings-hassle-free-trading-in-government-bonds-for-retail-investors","status":"publish","type":"post","link":"https:\/\/www.kredx.com\/blog\/rbi-brings-hassle-free-trading-in-government-bonds-for-retail-investors\/","title":{"rendered":"RBI Brings Hassle-Free Trading In Government Bonds For Retail Investors"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"7402\" class=\"elementor elementor-7402\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1cac0c1 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1cac0c1\" 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-674ed9f2\" data-id=\"674ed9f2\" 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-63efb62c elementor-widget elementor-widget-text-editor\" data-id=\"63efb62c\" 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;\">On 30 July 2021, Friday, the Reserve Bank of India announced that trading in <\/span><b>government bonds<\/b><span style=\"font-weight: 400;\"> will become a more simplified process for retail investors. Soon, they\u2019ll be able to open a Retail Direct Gilt (RDG) account with the Central Bank to buy and sell the securities directly.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Furthermore, retail investors can put in bids for government <a href=\"https:\/\/www.kredx.com\/blog\/7-basic-things-to-know-about-bonds\/\">bonds<\/a> in primary auctions similar to large institutions.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">It is not yet known when the Central Bank would implement this. However, RBI has disclosed various details concerning the same. <\/span><i><span style=\"font-weight: 400;\">Let\u2019s delve into them.\u00a0<\/span><\/i><\/p><h2><b>Who Are The Eligible Investors?<\/b><\/h2><p><span style=\"font-weight: 400;\">Resident, as well as non-resident retail investors, are eligible to open an RDG account with RBI to invest in <\/span><b>government bonds<\/b><span style=\"font-weight: 400;\">. However, they need to have a savings bank account, a <a href=\"https:\/\/messente.com\/phone-validator\" target=\"_blank\" rel=\"noopener\">working phone number<\/a>, and a valid email address. Furthermore, retail investors have to submit the following documents to open the account:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">PAN card issued by the Income Tax Department\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">KYC documents\u00a0<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">In case an individual doesn\u2019t fulfil the eligibility criteria, he\/she can open an account jointly with another retail investor who does.<\/span><\/p><p><span style=\"font-weight: 400;\">Next, take a look at how individuals can open an RDG account.\u00a0<\/span><\/p><h2><b>Steps to Open RDG Account\u00a0<\/b><\/h2><p><span style=\"font-weight: 400;\">Retail investors can complete the registration process and open an RDG account by following these steps:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Visit RBI\u2019s official website\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fill in the dedicated RDG account form available on the online platform<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Submit all the necessary information\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Authenticate the details with the OTP received via SMS and email to complete the registration process<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">Following the completion of registration, individuals will receive instructions to access the web portal via SMS or email.\u00a0<\/span><\/p><h3><b>Associated Fees and Charges<\/b><\/h3><p><span style=\"font-weight: 400;\">Here are the fees and charges in relation to an RDG account:<\/span><\/p><ul><li aria-level=\"1\"><b>Account Opening Fees: <span style=\"font-weight: 400;\">Not applicable<\/span><\/b><\/li><li aria-level=\"1\">Account Maintenance Charges: <span style=\"font-weight: 400;\">Not applicable\u00a0<\/span><\/li><\/ul><ul><li aria-level=\"1\">Fees To Put In Bids In Primary Auctions: <span style=\"font-weight: 400;\">Not applicable\u00a0<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">However, investors will need to pay fees\/charges that are associated with payment gateways as well as other services.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Registered users can subscribe to the primary issuance of government-backed financial instruments and access the NDS-OM via the online portal.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">They\u2019ll be able to invest in the following options:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Government of India dated securities\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Sovereign Gold Bonds (SGBs)<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Government of India Treasury Bills\u00a0<\/span><\/li><\/ul><h3><b>How To Buy Government Bonds?<\/b><\/h3><p><span style=\"font-weight: 400;\">Before this new process is implemented by RBI, investors can purchase government bonds in the following ways:<\/span><\/p><ul><li aria-level=\"1\"><b>Mutual Funds: <span style=\"font-weight: 400;\">This is one of the most common routes for <a href=\"https:\/\/www.kredx.com\/blog\/how-is-invoice-discounting-becoming-popular-among-retail-investors\/\">retail investors<\/a> when it comes to investing in <\/span>government bonds<span style=\"font-weight: 400;\">. For example, one can choose to allocate funds to a gilt fund which would further invest the fund corpus in the securities.\u00a0<\/span><\/b><\/li><li aria-level=\"1\">Banks And Post Offices: <span style=\"font-weight: 400;\">Investors<\/span> <span style=\"font-weight: 400;\">can<\/span> <span style=\"font-weight: 400;\">allocate their funds to government bonds via banks and post offices. Once all documents, such as PAN Card, Address proof, and such, are verified, they would receive their bond certificate.\u00a0<\/span><\/li><\/ul><ul><li aria-level=\"1\">Web And Mobile-based Applications: <span style=\"font-weight: 400;\">Investors<\/span> <span style=\"font-weight: 400;\">can purchase<\/span> <span style=\"font-weight: 400;\">government bonds through web and mobile-based applications like National Stock Exchange\u2019s NSE goBID.<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">One of the primary drawbacks of <\/span><b>government bonds<\/b><span style=\"font-weight: 400;\"> is low returns. Thus, for investors who are looking for higher returns than these securities, opting for corporate bonds can be an ideal alternative. Individuals can invest in them or any other avenue like PMS or digital gold \u00a0to fulfil their investment objective.\u00a0<\/span><\/p><h4><b>Bottom Line\u00a0<\/b><\/h4><p><span style=\"font-weight: 400;\">With the process to purchase government bonds becoming simpler, investors can soon invest in these securities without any hassle. However, before one chooses this option, it\u2019s essential to analyse the pros and cons and decide whether the <a href=\"https:\/\/www.kredx.com\/Invoice-discounting-investment\">investment<\/a> is in line with their financial goals.<\/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>On 30 July 2021, Friday, the Reserve Bank of India announced that trading in government bonds will become a more simplified process for retail investors. Soon, they\u2019ll be able to open a Retail Direct Gilt (RDG) account with the Central Bank to buy and sell the securities directly.\u00a0 Furthermore, retail investors can put in bids [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7403,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[879,94],"tags":[882,98,860,890,76],"class_list":["post-7402","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bond-investment","category-investor","tag-bond-investment","tag-bonds","tag-government-bonds","tag-invest-in-bonds","tag-kredx"],"_links":{"self":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/7402","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=7402"}],"version-history":[{"count":7,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/7402\/revisions"}],"predecessor-version":[{"id":18673,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/posts\/7402\/revisions\/18673"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/media\/7403"}],"wp:attachment":[{"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/media?parent=7402"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/categories?post=7402"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kredx.com\/blog\/wp-json\/wp\/v2\/tags?post=7402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}