Should I invest in government bonds? Whats the process and what will I achieve out of it?
When I first looked at government bonds, I realised they’re one of the safest ways to grow money. Since the Government of India backs them, the risk of default is almost nil. What really helped me was learning the different ways to buy them.
You can invest in government bonds directly or through intermediaries. The choice depends on how much control you want over your investment.
Here are the main ways to invest in Govt bonds:
- RBI Retail Direct: It allows retail investors to participate directly in the government securities auction.
- Banks and Brokers: Many banks and SEBI-registered brokers offer these bonds. You can contact them to participate in the auction.
- Stock Exchanges (NSE/BSE): You can buy bonds through your trading account, just like shares. Settlement happens via Demat, which keeps everything organised.
- Bond Funds: If you prefer diversification, you can choose to invest in bond funds, which have government securities in their portfolio.
Government bonds suit conservative investors or anyone wanting stability in their portfolio. Personally, I use them to balance the risks of equities. So, if you’re looking for steady growth with low risk, government bonds are a great place to start.