Guide To Purchase Government Securities In India

Posted By: Sreya Dutta
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It does not matter whether you are one of the players in stock market or just somebody who would rather play safe and invest their money in fixed deposits or mutual funds. Because no matter how much we would like to agree with you on the fact that being safe is way better than being sorry, we would also agree more that risk-taking plays a highly essential and important role in the path towards success and development. And this is more than just a true statement especially in today's era.

Guide To Purchase  Government Securities In India

Hence, before you dive into your investment pathway hoping to emerge more successful and richer than ever, we would like you to take a brief sneak peek into exactly how or where you would want to purchase those government bonds or securities you've been planning to invest in.

A brief introduction to Government Securities

Government securities do sound kind of both exciting as well as confusing, but they really are of so much more importance than you would realise. The most exciting part is that not only can banks or industrialists invest in them, but every individual can too, of course, as small term investors though.

Assurance and safety

You need to make up your mind regarding whether you want to plan on putting your money into short-term investments or long-term ones. Once you do, a systematic approach might not only ensure the safety of your money but also help you grow it better. If shares are what you want to invest in, you need to make sure that you have a Demat account. These accounts are the staging grounds for all the mutual funds and trading stocks to take place.

If the thought of stock market scares you too much, you need to stop worrying and understand the fact that government bonds or stocks are generally unavailable at the stock market. Post offices and all the superior banks are where they are really available.

How to make investments in Government securities?

If you are wondering where to start with making your investment in government securities, all you really have to do is simply visit your nearby branch with all necessary documents and fill up the application form. Then after a brief minimum time period required to process your request, you will simply receive your bond certificate with your name in it.

Registration and process details

Earlier common individuals or small-time investors were not allowed to invest in government securities, but, thanks to RBI, a very helpful scheme called the NDS-OM or the Negotiated dealing system - order matching platform has been introduced, which now allows us to do so. Now along with all the primary investors and the banks standing as existing members of the RBI NDS-OM scheme, individual investors like us too can sell and purchase bonds through this platform.

Important details about government securities

An important detail about which you should know is that government securities are actually held in terms of SGL or Subsidiary General Ledger accounts. Which is why the government clears the order, then converts the SGL into the accounts demat form and transfers the fund to the same demat account once the PDs or banks execute the order.

Advantages

1. Not being registered under NDS-OM, other dealers will not be able to trade on your behalf, which is one of the best advantages of investing in government securities.

2. Especially retired individuals or long-term investors can avail superior advantages by investing in government securities. Senior citizens investing long term for approximately 20 to 30 years can enjoy a direct interest of an overwhelming 8% on their money, which is very much higher than majority of the debt instruments.

3. Another great news is that you can also get some great tax benefits, apart from just saving your money, if you invest in government securities.

Concluding tips

1. If you are looking for safe forms for making your transactions, investing in mutual funds might prove to be your best bet, especially in the volatile market.

2. You would need to research well and read thoroughly into all the minute details about Government securities before you invest your money and hope for success.

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