Government Bonds in India 2023
Before learning about the different types of Government Bonds in 2023 (i.e. a list of government bonds in India).
It is important that an investor knows, “What are Government Bonds in 2023?”. Therefore, Let’s start with the basics of a bond.
Government Bonds are securities issued by the Central or State Government to borrow from financial markets to fulfill their financial deficit. However, these bonds are a part of the G-Sec (government securities) profile.
Since the Government of India backs these, these are practically risk-free investments.
The guarantee of the Government is also known as a ‘Sovereign Guarantee’.
Generally, the two key categories of these bonds are, Treasury bills (i.e. T-bills) mean short-term bonds, which mature in 91 days, 182 days, or 364 days, and Dated Securities mean long-term bonds, which mature anywhere between 5 years and 40 years.
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Central Government issues both, T-Bills and Bonds while the State Governments issue only bonds, which are known as State Development Loans (SDLs).
The interest rate offered on the government bond in India is known as the coupon rate. However, the coupon can be either fixed or floating and disbursed on a semi-annual basis.
To conclude, let’s take a look at government bonds in India along with their features and what makes them a suitable investment for a retail investor.
Also Read Government Bonds India – A Detailed Guide for 2021
List of Government Bonds in India
- Securities issued by the Central or State Government of India
- Issued through RBI on behalf of the Government of India
- T-Bills are zero coupon bonds. Therefore, they are issued by discount and redeemed at face value.
- Long-Term Government bonds or dated securities have maturities of up to 40 years and pay interest every six months.
The following are the different types of Short-Term & Long-Term Bonds.
Also Read RBI RDG Account – Buy & Sell G-Secs, Bonds, T-bills, and State Development Loans
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Short-Term Government Bonds
| Bonds | Tenure | Interest Rate | Detailed Guide |
|---|---|---|---|
| Treasury bills (T-bills) | 91 days, 182 days, or 364 days. | T-Bills are issued at a discount and redeemed at the face value at maturity. | Click here |
| Cash Management Bills (CMBs) | less than 91 days. | CMBs are issued at a discount and redeemed at the face value at maturity. | NA |
Also Read What are the Treasury Bills in India? – Maturity Period | Features | Issued by
Long-Term Government Bonds
The multiple variants of Dated Securities or Long-Term Government Bonds are discussed below.
List of Central Government Bonds in India
| Bonds | Tenure | Interest Rate | Detailed Guide |
|---|---|---|---|
| RBI Bonds | 7 Year | 7.15% | Click here |
| Sovereign Gold Bonds | 5 Year | Fixed-rate of 2.5% per annum + Gold Price | Click here |
| IINSS-C | 10 Year | Fixed-rate of 1.5% per annum + Inflation Rate | Click here |
| Bonds with Call or Put Option | 5-40 Year | Depends on the issued time. | NA |
- Tax-Free Bonds
| Bonds | Tenure | Interest Rate | Detailed Guide |
|---|---|---|---|
| NHAI – National Highways Authority of India | 10 to 20 years. | 7.00% to 7.50% | Click here |
| IRFC – Indian Railway Finance Corporation | 10 to 20 years. | 7.00% to 7.50% | Click here |
| PFC – Power Finance Corporation | 10 to 20 years. | 7.00% to 7.50% | Click here |
| HUDCO – Housing and Urban Development Corporation | 10 to 20 years. | 7.00% to 7.50% | Click here |
| REC – Rural Electrification Corporation Limited | 10 to 20 years. | 7.00% to 7.50% | Click here |
- Capital Gain Bonds or Tax Savings Bonds or 54EC Bonds
| Bonds | Tenure | Interest Rate | Detailed Guide |
|---|---|---|---|
| Indian Railways Finance Corporation (IRFC) | 5 years | 5.00%-5.5% | Click here |
| Rural Electrification Corporation (REC) | 5 years | 5.00%-5.5% | Click here |
| Power Finance Corporation (PFC) | 5 years | 5.00%-5.5% | Click here |
| National Highways Authority of India (NHAI) | 5 years | 5.00%-5.5% | Click here |
Also Read How to Buy Treasury Bills in India? | NSE goBID | Eligibility | Bidding Period
State Government Bonds
State Development Loans, also known as SDLs, are issuances of the respective states in order to manage their own state finances. In general, SDLs are similar to that fixed-rate Dated Government Bonds.
Though, these are usually issued for maturities up to 10 years. For retail investors, the minimum bidding amount is INR10, 000 (face value of the bond) and after that in multiples of INR 10, 000.
SDLs generally give higher rates than Central government bonds. The liquidity of these bonds is yet another component that has a bearing on SDL valuation.
Though, investment in SDLs may be a good option for investors seeking to earn higher coupons.
To invest in these bonds, investors need to sign up either on the BSE Direct OR NSE forbid. These platforms also offer central government bonds and treasury bills.
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