Module 8   Currency, Commodity, and Government SecuritiesChapter 19

Government Securities

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19.1 – The new beginning

In a fascinating new development, NSE in collaboration with RBI has recently made it possible for retail investors to start investing in Government Securities, mainly the long-dated bonds and the treasury bills (T-bills).

These were products which were available only to banks and the large financial institution, but now we can invest in them and take advantage of attractive and guaranteed returns. However, since these are new financial instruments (at least to the retail participants), understanding the nuances before investing is important. For this reason, we have put the following conversational FAQs with a hope that you will be able to figure out the basics.

Do read on and post your comments below.

19.2 – FAQs on G-Sec


What am I investing in?

You are investing in Bonds/T-bills issued by the Government of India. Since the Government of India backs these, these are virtually risk-free investments. The guarantee from the Government is also called ‘Sovereign Guarantee’.

What are bonds/T-bills?? Tell me more.

Whenever you and I need money, we go to the bank to avail a loan. Against this loan, we promise to pay the bank periodic interest and also return the money after a certain amount of time. This is common practice, where the interest and principal are repaid to the bank.

Likewise, the Government of India also needs money to build roads, bridges, dams, hospitals, etc. When they run short of money, they approach their bank for a loan, which is the RBI. The RBI, in turn, auctions the loan in the form of bonds/T-bills that you can purchase. Essentially, you are lending a part of the overall loan the government is seeking.  Against this loan, the Government of India, promises to pay periodic interest and also repay the principal at the end of the tenure.

The loan which the government intends to repay within a year is called the Treasury Bills or T-bills. Loans which the Government intends to repay over many years are called the Bonds.

What should I choose? T-Bills or Bonds?

Both are great investments if you seek the safety of your capital. There are a few easy to understand variables that you need to look at before deciding on an investment in these two G-Sec instruments.

Variables like what? Start with T-bills, please.

There are three T-bills variants, and they vary based on the maturity period. They are 91 days, 182 days, and 364 days. T-bills do not carry an interest component; in fact, this is one of the biggest difference between T-bills and Bonds. T-bills are issued at a discount to their true (PAR) value, and upon expiry, it’s redeemed at its true value.

Woah! That sounds complex. Give me an example, please!

Ok, consider a 91-day T-bill. Assume the true value (also called the Par value), is Rs.100. This T-bill is issued to you at a discount to its par value, Say Rs.97. After 91 days, you will get back Rs.100, and therefore you make a return of Rs.3. Think of it; this is as good as buying a stock at Rs.97 and selling it after 91 days at Rs.100.  The only difference is that this is a guaranteed transaction, meaning, there is no risk of you selling below 100 (or above 100).

This sounds quite straightforward, is there anything else I need to know about T-bills?

That’s it pretty much. You need to remember that t-bills are issued at a discount to par, and upon maturity, you get the Par value. Of course, you can get a little technical and measure the yield of this investment if you want.

I’m all ears, let’s get technical!

Yield essentially measures the return on your investment on an annualized basis. After all, all investments should be measured by its returns on an annualized basis. So if you have made 3 bucks over 91 days on investment of Rs.97, then at this rate, how much would you have made every year?

The formula is –

Yield = [Discount Value]/[Bond Price] * [365/number of days to maturity]

= [3/97]*[365/91]

= 0.0309*4.010989


So in other words, the T-bill offers a return on investment of 12.4052%, but since you held it for 91 days, you will enjoy this return on a pro-rata basis.

Typical 91-day yields are around 6-7.5%. Needless to say, the higher the yield, the better it is.

What happens upon maturity of a T-bill?

Upon the maturity, the Government debits the T-bill from your DEMAT automatically, this is called ‘Extinguishment of Securities’ and the par value gets paid to the bank account linked to your DEMAT account.

Is that all about T-bills? Is there anything else that I need to know?

Nope, that’s it. You are all good to start 🙂

Alright, tell me how the bonds work.

Bonds differ from T-bills on 2 counts. Bonds have long-dated maturities, and they pay interest twice a year.

Sounds, interesting. Can you give me an example?

Every bond issued will have a unique name or symbol. The symbol contains all the information you’d need. For example here is a symbol – 740GS2035A, and here is what this really means –

Annualized interest – 7.40%

Type – Government Securities (GS)

Maturity – 2035

Issue – ‘A’  means it’s a fresh issue (don’t worry much about this, be aware that this is NSE’s internal nomenclature for their own book-keeping )

This issue is expiring in 2035 or 17 years from now (we were in 2018). If you were to invest in this bond, you would receive a 7.4% interest every year until its maturity in 2035. Please note, the interest will be paid semi-annually so that you will get 3.7% interest twice a year. Finally, upon maturity, you will also get back your principal amount.

Here are few more government security (GS) symbols –

Symbol Annualized Interest Semi-annual interest Maturity Year # years to Mature
662GS2051 6.62% 3.31% 2051 33
668GS2031 6.68% 3.34% 2031 13
737GS2023 7.37% 3.68% 2023 5

Can you give me an illustration to help me understand how much I earn if I were to invest in a bond?

Fair enough, but before we get into the details, you need to know one more thing.

Every bond has a Par value, of say Rs.100. When you invest in a bond, you usually invest either at a discount (ex: 98, 97 etc.) or par (100), or a premium to par (101,102 etc.). The price at which you invest in a bond depends on something called an ‘auction process’. More on that later, but for now, you need to be aware that you can invest in a bond at par, at a discount, or a premium.

Now, consider you invest in 700GS2020 (7% with a maturity of 2020 or 2 years from now) at a discount price of 98.4. Assume, you invested in 150 of these bonds, so you’d pay –


= Rs. 14,760/-

From the time you invest, the interest cycle starts. The interest is paid on the face value of the bond. The total amount you earn is as follows –

Time Period Interest Cash flow Remarks
0 – 6 Months 3.5% 3.5% * 100 * 150 = Rs.525 Half year interest
6 months  – 1 year 3.5% 3.5% * 100 * 150 = Rs.525 Half year interest
1 – 1.5 years 3.5% 3.5% * 100 * 150 = Rs.525 Half year interest
1.5 – 2 years 3.5% 3.5% * 100 * 150 = Rs.525 Half-year interest
At Maturity (2 years) Principal repayment at Par 150 * 100 = 15,000 Additional Rs.240

So on an investment of Rs.14,760/- you will earn –

525 + 525 + 525 + 525 + 15,000

= 2100 + 15,000

= Rs.17,100/-

If you do the math, the yield on this works out to approximately 7.88%. RBI has beautifully explained the calculation of yield here, do check this if you are keen to know more.

I’ve heard the term ‘ Yield to Maturity’, is this the same? 

Hmm, not really. The concept of ‘Yield to Maturity’ or YTM is a little tricky. The YTM calculation assumes that you reinvest the interest payment back into a similar bond, which further generates interest on interest. Bond traders and institutional investors only look at YTM because this is the true comparable value between two different bonds.

This is similar to reinvesting the dividends from a stock back into the stock.

Alright, tell me about the interest payment? How does it get paid?

The interest payment gets credited directly to your bank account linked to your DEMAT account, just like the way you receive the dividends from a company.

Can you give me some insights into the auction process?

Till recently, investment in G-Sec bonds/T-bills was restricted to banks and large financial institutions with a minimum ticket size of 5 Cr. However, recently NSE and RBI have opened it up to retail investors with a minimum of Rs.10,000/- investment.

However, the price you pay for the bonds is still decided by the banks and other major financial institutions. They place bids on RBI’s auction platform, and RBI decides the price of the bonds based on these bids placed on their platform. So the auction process is basically a process to discover the price you’d pay for the bond, also called the weighted average price of the bond.

So it is the weighted average price of the bond, the price I need to pay to purchase the bonds?

Yes and no.

At the time of placing your order, you pay a slightly higher amount. This amount is called the ‘amount payable’. Once all the orders are placed, the auction process starts and RBI evaluates the weighted average price. Any difference between the ‘amount payable’ and ‘weighted average price’,  is credited back to your account the very next day.

Wait for a second, what do you mean by ‘option to sell in secondary market’?

This works exactly like how you buy and sell stocks.

Let’s say you decide to invest in 740GS2035A. This means you will continue to enjoy a semi-annual interest payment of 3.7% every 6 months for the next 17 years, till 2035.

Now, after a few years, you no longer wish to hold this bond. In such an event, you can decide to sell this bond in the secondary market, pretty much like how you buy and sell stocks on NSE.

Check this post on TradingQ&A to know more about selling G-Sec in the secondary market.

Great! It looks like I’ve got my basics right. Is there anything else that I need to know?

Think of the whole thing as applying for an IPO followed by the stock getting listed on the exchanges. It’s pretty much the same. The auction process is like the IPO, and once the bidding is done, the Bond (or T-bill) will get listed on the exchange. You can sell the bond whenever you want, or you can even trade the bond once it gets listed!

The minimum ticket size is Rs.10,000/- and its multiples and a maximum of Rs. 2 Cr. You can place the orders when there are new auctions (just like an IPO). However, the good part is that RBI notifies the auction dates and schedule well in advance.

Here is the calendar for the upcoming t-bills auctions.

Here is the calendar for the upcoming bond auctions.

Here is the link of all the bonds that have been issued by RBI. Do pay particular attention to the nomenclature, coupon rate, and year of maturity.


What are SDLs?

To meet the budgetary requirements, State Governments also raise loans from the market, and these loans are called State Development Loans (SDLs). These loans are similar to the dated securities issued by the Central Government, the interest is credited half-yearly, and the principal amount is repaid at the time of maturity. SDLs also qualify for Statutory Liquidity Ratio (SLR), and they are also eligible as collaterals for borrowing through market repo as well as borrowing by eligible entities from the RBI under the Liquidity Adjustment Facility (LAF) and special repo conducted under market repo by CCIL. You may read this FAQ from RBI for more information. 

Here is the calendar for the upcoming SDLs auctions.

How does the Floatation and Yield of SDLs work?

RBI facilitates the issue of SDL securities in the Market, and the auctions are generally held every fort-night. These are traded electronically on the RBI managed NDS-OM (Negotiated Dealing System-Order Matching). Below is the snapshot of some securities floating for auction as on October 12th, 2020 on the NDS-OM managed by RBI. 

Like every other Government Security SDLs also have a unique name or symbol. For example, let’s take 05.75APSDL2024 Security from the above snapshot. And, here is what it really means:

Annualized Interest – 05.75 

State CodeAP (Andhra Pradesh in this case) 

Type – SDL

Maturity – 2024

This issue is expiring in 2024, i.e. 4 years from now (we are in 2020). If you were to invest in this bond, you would receive 5.7% interest semi-annually until maturity, which is 2024. Please note, similar to other G-Secs the interest for SDLs will also be paid semi-annually so that you will receive 2.8% interest twice a year. Finally, upon maturity, you will also get back your principal amount.

What about the Risk Assessment?

Unlike most G-Secs that have Implicit Sovereign Guarantee ( High Risk or significant funding cost advantages for the institutions that benefit from them), SDLs are associated under Explicit Sovereign Guarantee, which basically means, according to CRAR prudential norm released by RBI the risk accompanied with SDLs is weighted as zero. Banks are not required to keep any capital for investing in SDLs. Hence, making it the risk-free instrument to invest in than most of the other Central Government Securities. 

What about taxes?

Bonds – Interest income is credited to your bank account. It is considered as income from other sources and taxes have to be paid as per the income tax slab. If there is any appreciation in the bond price, it is considered capital gains. Long-term (LTCG) is 10% flat or 20% with indexation. STCG is as per the applicable slab rate.

T-bills – You buy at a discount and sell it at par. This appreciation is considered as short-term capital gain, and taxes as is per the applicable slab rate.

In the case of G-Secs, the gain is considered long-term (LTCG) if held for more than 3 years. Otherwise, it is short term capital gain (STCG).

Will I get assured allotment if I place my order?

These securities are issued for limited amounts, and there is no guarantee of allotment if the number of bids received is higher than the issue size. However, if you fail to get an allotment, you can try again next week. RBI carries out multiple issues a month.

This sounds good. How do I start?

Start Investing Now!

Happy investing!

Post your comments below.


  1. Nikunj Purohit says:

    I did bit of research about 700GS2020 and similar names on NSE . I can only found bond futures trading on NSE that too with very low volumes. Also can you tell me ticker for T-bills or they will be available post 2018 Aug? Am I missing something?
    Also I have read in books that people invested in bonds during 2008 crash and still made money. Which script do they went for in Indian markets?

    • Karthik Rangappa says:

      Nikunj, yes at present only the bonds are listed. The actual bonds are yet to be listed, and NSE says they will be listed by August this year and I guess the trading symbol will be known around the same time.

      I have no idea about the 2008 bonds, Nikunj. But I’m not surprised at all. When there is fear in EQ markets, the bond markets tend to perform quite well.

    • Milind says:

      I want to buy old Gsecs (meaning Gsecs which were auctioned long back and have high interest rate) i don’t see any sellers do i know the Gsecs traded in the secondary market ? Maybe i can buy from those ?

  2. Gokul says:

    How to Actually invest in these securities ? Can we do this from our Dmat Account or there is any other way ?

  3. Kiran G says:

    Is interest earned on this bills and bonds are taxable ?

    • Karthik Rangappa says:

      Yes, they are taxable.

      • A J says:

        The article says that indexation benefit is available. How is that possible if we are getting paid interest semi annually?

        • Karthik Rangappa says:

          Indexation is on the capital appreciation i.e the difference between the price at which you buy the bond and the price at which you sell the bond. The interest income gets clubbed to your other income and you are taxed accordingly.

          • Sujeet Raj says:

            Hi Karthik, the price of the bond gets pulled to the par as time passes (if nothing else changes aka credit rating of the govt), hence shouldn’t we price the bonds (buy price) at it’s constant yield-price trajectory while selling and calculate our capital gains against this price so that it is amortized over it’s time period.

            Example for discount bond: We buy bonds @ Rs 95. After 2 years we sell @ Rs 98. But as per the constant yield trajectory, the price of the bond should be Rs 97. That means we have made capital gain of 98-97 = Re 1.

            This is what I studied for CFA. Not sure how Indian Tax laws interpret it.

          • Karthik Rangappa says:

            Sujeet, this is interesting, but I don’t think the taxation works on constant yield-price trajectory. I will verify and get back. However, when you hold the bond for more than 3 years, you can take the benefit of indexation (for capital gains), which works pretty much like the way you explained in the example.

          • Sujeet Raj says:

            Also, If we invest (from initial bidding)/buy at Rs 95 and hold till maturity, we will get Rs 100. Then this is the maturity amount which we are guaranteed to get. I don’t think this should be considered as Rs 5 capital gains. The constant yield-price trajectory supports this idea.
            Similarly, if it is a premium bond that we buy (say @Rs 105), we will still get Rs 100 at maturity. We shouldn’t be able to show this as capital loss.
            Please do verify and update us. Thanks a lot 🙂

          • Karthik Rangappa says:

            Sujeet, this is interesting, we will take the opinion from a tax consultant for this. Meanwhile, this is like the indexation way of treating capital gains. Maybe you should check this.

          • Sujeet Raj says:

            I guess India follows indexation rules then. Same as in debt MFs. Bit different. Sad that it will be considered STCG for T-Bills and bonds below 3 years and taxed. But it does make the calculations much easier.

            How is the 10% flat or 20% with indexation chosen for LTCG?

          • Karthik Rangappa says:

            This is like the debt mutual funds, Sujeet.

  4. Rohan says:

    Hey Kartik!
    I wanted to know whether there are any free paper trading platforms available online. Could you please help me out here.

    • Karthik Rangappa says:

      I’ve not really explored paper trading platform, Rohan…so cant really help you with this.

      • Raghu Vaishnav says:

        Hi Karthik Rangappa

        if we calculate the ytm for 91 days T bill ( at indicative yield of 6.93 % as shown on coin page ) ,
        then the result is around 29 % . Is this so good to be true ?
        It means that we can have almost 30 % return via investment in bonds alone (of course repeatedly investing upon maturity till 1 year ) ?

        • Karthik Rangappa says:

          YTM is on an annualized basis, Raghu. So 6.93% is for the entire year.

          • Sai Rikwith says:

            If annualized percentage is 6.93% for 91 days as given on coin website.
            Suppose i invested 10,000 then how it is calculated for 91 days and how much money will get into my trading account after 91 days.

          • Karthik Rangappa says:

            You will get 100 minus the allotment price after 91 days.

          • Soumitra Dev Burman says:

            Hi Karthik,

            I did not understand the comment you made “You will get 100 minus the allotment price after 91 days.” Can you please explain a little more?

          • Karthik Rangappa says:

            This line actually refers to the P&L, let us say the allotment price is 98, then the profit that you make will be 100-98 = 2. You will get this amount after 91 days.

  5. Bharat Gupta says:

    How can we invest in government bonds and securities on Zerodha ?

  6. Saurabh Phapale says:

    Hi Karthik,
    Can you explain more about auction process for retail investors? How we can apply for auction? Currently der is not much information about it.

  7. Apoorv says:

    Sir, what brokerage do u charge in buying and selling of G-bonds and T-bills?

  8. Siddharth Sharma says:

    When is zerodha planning to start allowing retail investors to participate in non competitive auction? It was announced by nse in may, and no major player has started it yet.

  9. D.laxmi says:

    Oka sari bond konte malli konanousaram leda prathi sanvasaram

    • Bhuvanesh R says:

      Oka saari bond konte, maturity unna varaku, meeku interest vasthuntadi. Prati samvatsaram konalsunna avasaram ledu. Prastutam, ee bonds meeru inka Zerodha lo konadaniki avvadu. Twaralone konocchu.

  10. shaawm says:

    Any idea how liquid this will likely be? The retail bond market is so illiquid that I have mostly given up on my aim to build a cost effective liquid debt portfolio. Will there be a common platform where retail and institutional lenders compete with scope for block deals? I feel the retail debt in India is artificially protected with schemes like ppf etc., I have seen people who had TDS for their FDs and still getting good tax refunds. Sad situation indeed.

    • Karthik Rangappa says:

      We are working on this product and on priority. Request you to kindly wait for few weeks, thanks 🙂

  11. VC says:

    So just to get a better idea, people say Gsec bond market is volatile, but if i buy and hold till maturity ? In that case i dont have to worry on volatility right ?

    For eg: Face Value is Rs 1000 at 7% (annual payment) and i buy that bond at 1090 and hold it for 30 years, my annual payment is Rs 63 for that 30 years period right ?

    Also by when will this be available in Zerodha ? Do we have the facility to buy 7.75% GOI bonds in Zerodha as well ?

  12. Aritra says:

    Hey Karthik, sorry to ask this once again, but you guys are definitely going to bring out a platform for retail investors to access T Bills and GSecs, right? And can you give an approximate timeline for when it’s going to go live, like end-November, December, or next year?

    The reason I’m asking is that for personal reasons I’ve had to stop equities investments; I’m only interested in fixed income as of now. So the only reason for me to open an account with you guys would be to access T-Bills and GSecs.

  13. Deepak Gupta says:

    Hi! What happens to the interest in case I sell the bond in between interest periods (six months)? Is it priced into the bond sale value accordingly?

  14. Saurabh says:

    Hey, this post is really informative and I saw the comments about setting up an order collection form where we can place our orders to buy these securities.

    My question is: What is the difference between Bonds described in this FAQ ( VS the Bonds described here? If both are same, do the yield and return calculations done in a similar way? Also, if both are the same securities we’re talking about, how come the buying options are different?

    Waiting for your help,

    • Karthik Rangappa says:

      Saurabh, the bonds and t-bills described here are from the primary market plus they are backed by the Govt of India. On the support page, we are talking about bonds available on the secondary market, mainly tax-free and corporate bonds.

      • Saurabh says:

        Hi Karthik, Thanks for the reply. I got the difference. My question is : If I buy bonds from secondary market, am I eligible for all the conditions of the bond like interest rates, maturity periods etc? I have been reading RBI post about this, but there’s no definite mention about such things (

        Again, many thanks in advance!

  15. Shyam says:

    Hi Kartik sir,

    When will we be able to buy rbi t bills and bonds on zerodha platform?

  16. Vinny says:

    Hi Karthick,

    Can i buy T-Bills and pledge them to zerodha and get trading margin ?
    If Not, will zerodha be open to consider it ? (i mean, if you are giving margin on stocks, T-Bills/Bonds are literal cash. :))

    – Vinny

  17. Harshesh says:

    Hello ,

    Can you help me regarding how to know if the particular Bill/Bond is available at discount/Par/Premium on the platform.


    • Karthik Rangappa says:

      As retail participants, we are price takers. Remember this is a non-competitive bidding, hence it would be difficult to ascertain if the bond will be priced at PAR or discount.

  18. Ashwin says:

    What is the penalty for early withdrawal?

    • Karthik Rangappa says:

      There are no penalties as such for early withdrawal.

      • Ashwin says:

        1. So say for 90 day T-bill, I could withdraw the amount in 30 days and still get the applicable % returns for the invested 30 days?
        2. Then why do they have 20 years and 40 years bonds, I could subscribe them and withdraw after a year with higher interest right?

  19. Uday says:

    Are 91 days T-Bills are tax-free? if it’s tax-free, In a year how many times I can invest in that? and what will be ROI on that?

    • Karthik Rangappa says:

      They are taxed like the way fixed income funds are taxed. This also means you can avail the benefit of indexation. You can invest in t-bills as many times as you want. No restriction on that.

  20. Ashish says:

    When interest paid? is there any fix date?

  21. Nitin says:

    How to know if the particular Bill/Bond is available at discount/Par/Premium on the platform.

    • Karthik Rangappa says:

      As retail participants, we are price takers. Remember this is a non-competitive bidding, hence it would be difficult to ascertain if the bond will be priced at PAR or discount.

  22. KUNJAN says:

    Do you provide margin against T bill held zerodha? If yes than how much?

  23. Sathya says:

    Can we know the brokerage charged for this T-bills and Bonds?

  24. Sudeep H S says:


    Can you tell will be there be MTM of government securities (bonds) basis closing price if these bonds every day. Bcos if there is a -ve MTM then there will be loss if holder decides to sell. Thanks

  25. Sudheendra says:

    I placed an Order for 184 T Bill but I do not see that now , where can i track the Orders I do not see anything on the coin/gsec page

  26. Tejas says:

    1.on maturity of 10 years g sec principal repayment happens to bank account or trading account? case of accidenttal death of g sec holder are these bonds transferred to nominee of demat account ?
    If yes can nominee able to sale bond or hold till maturity

    • Karthik Rangappa says:

      1) Bank account. The government debits the bond from your DEMAT, this is called ‘Extinguishment of Securities’.
      2) Yes for both.

  27. Harish says:

    Hi Karthik,

    I need to understand more on the secondary market.

    Let’s say I bought a bond which will mature in 10 years from now for 10,000. I hold it for 2 years and get the interest amount semi-annually. After 2 years I want to sell the bond in secondary market, but why would anybody buy it for higher price than 10,000 and get back only 10,000 after maturity ? Instead they would prefer to buy a new bond , right?
    I mean in stocks, if the company is doing well ( plus other market factors) the stock price goes up. What are the factors here that contributes for the bond price to go up ?

    • Karthik Rangappa says:

      Harish, the prices of bonds are market driven, just like the way the price of the stock does. The fluctuating price makes the yields attractive/unattractive to investors and therefore. Interest rates play a huge role in determining the price of the bond.

  28. Shalem Raju says:

    With this said, can clients apply for IPO through Zerodha any soon? Asking as there is a bidding process going in this flow.

  29. Harahad Kataria says:

    I find T-bills to be more attractive investment than bonds, how am I wrong with this statement?

    • Karthik Rangappa says:

      Not really, both differ in terms of the maturity period and cashflows. The yield is roughly the same.

  30. Jagath says:

    Hello Karthik,
    Thanks for educating!!.
    Not everyone has a great heart to share the knowledge.
    I’m actually searching for material which helps to know everything about trading coffee, but couldn’t find any. I had approached traders who trade coffee, but couldn’t find a convincing answer. Can you help me out with the problem.
    Thanks in advance ☺

    • Karthik Rangappa says:

      Thanks for the kind words, Jagat. By the way, coffee futures are not available on MCX, yet.

      • Jagath says:

        How do people trade coffee??
        I’m curious about this topic because I’m from coffee town and there are traders who trade coffee, on what basis do they get into trade or how do they predict the direction of price?
        When can we expect this on MCX as coffee is one of the largest trading commodity by volume next to crude (If I’m not wrong)

  31. Puneet says:

    Guys – Your transaction costs for G-Sec’s are 0.06% or Rs 6 for every Rs 10,000 invested? In that case for 91 day TBill we are effectively paying 0.24% annualized which is quite high? Suggest considering 0.06% annualized for G-Sec’s which would mean pricing a little differently for short term paper. Thanks, Puneet

    • Karthik Rangappa says:

      Puneet, this is only in the case of 91-day t-bill (i.e if you really consider Rs.6 is very high for Rs.10,000/- invested). For 181 and 364 days t-bills, it works out to 0.12% and 0.06% on an annualized basis.

      • Puneet Gupta says:

        Thats exactly right and it’s not about the amount but uniformity in pricing. Hence the suggestion that you could price all the T-Bills with an annualized 0.06% cost structure… Therefore the 91 day could be 0.015% and so and so forth… Anyway this was just an observation – If it doesn’t make economic sense for you guys – It’s fine.

        Today the only incentive to buy 91 day paper is the 0.4% to 0.5% spread especially given hikes in the future are certain and if one has to give up 50% of the spread in transaction costs – it will be not be attractive. Just an observation for you guys to consider…

        • Sanchita Roy says:

          After considering the brokerage of 0.06%, the effective yield is lowered from 6.93% to 6.65%, for 91days t-bill.
          For an investment of Rs 10000, brokerage charged is Rs. 6.96

          • Karthik Rangappa says:

            Sanchita, I was looking at Oct 2018 91 Day t-bill issue @ 98.26. The yield on an annualized basis works out to 7.10% without the charge. Post-charge, it drops to 7.07%.

        • Karthik Rangappa says:

          Thanks, Puneet. This is a valuable observation. I’ll pass the feedback to the product team.

  32. Thamodharan says:

    Thank you sir, whats the procedure to write to you? Do we need to call and inform on this or any platform is provided by zerodha for selling T-Bills?

  33. Ramesh says:

    For the various bonds is there a webpage where we can quickly find out dates for interest payment, ex-dates etc.? Gsec prices can vary all the way from say, Rs. 85 to 105 depending upon coupon rate, residual maturity, date of interest payment, etc. Knowing these dates will become very important when one wants to sell them.

  34. Aditya Shingvi says:

    Can the Zerodha Varsity team come up with a comparison between T-Bills ( 91,182,364 day) vs Debt Mutual Funds with duration less than 1 year ? ( Liquid Funds, Ultra Short Term Funds )

  35. Js says:

    Can we classify STCG as business income, just as we do with stocks? Or is classifying it as Capital Gains absolutely necessary?

    • Karthik Rangappa says:

      Its best if you check with your CA for this. But I guess this goes under Capital gains as you don’t really invest in GSec for a living.

  36. Nikhil Gupta says:

    govt securities come under income tax rebate.



  38. Arjun says:

    Can I show this under any section like section 80 C while filing returns ? Ie tax returns.

  39. Harsh says:

    Is it possible to buy State gov securities (bonds) as well at Zerodha? If not, by when expected?

    Thanks so much.

    • Karthik Rangappa says:

      Not for now, Harsh. We have Gsec and T-bills for now. Hopefully in the near future.

      • Harsh says:

        Thanks so much. A few more questions please:

        1) Do I need to first move money into my Zerodha A/c to buy G-secs, or the money is pulled from linked bank a/c as I put in my buy order?

        2) Are the RBI/Gov’s sovereign gold bonds possible to buy at Zerodha?

        Thanks again, so much.


        • Karthik Rangappa says:

          1) You need to have funded your trading account go buy G Sec (like the way it works for MFs)
          2) Yes, check this –

          • Harsh says:

            Great 👍, Thanks.

            Looks like I missed the recent window on Oct 19. Is there another window coming up at Zerodha? Thanks for your answers and guidances.

          • Karthik Rangappa says:

            Not really, bids will be open from Monday to Tuesday and will close at 8 PM on Tuesday. Bonds open on Tuesday and close on Wednesday.

  40. Nirmala Agarwal says:

    Very nicely explained.

  41. nikhil arora says:

    need to know the tax structure for G-Sec. they are taxed like EQ? LTCG STCG 10 % and 15 % resp.
    A bit of confusion here.

    Also on RBI’s portal Faqs it says do not buy Gsec from a brokerage firm , instead buy it from E-Kuber RBI banking platform. need clarification on this

    • Karthik Rangappa says:

      They are taxed exactly like the debt MFs, Nikhil.

      Btw, I’m not sure why RBI would say that 🙂 Can you please share the link?

  42. SHANKAR says:



  43. Srinivas M says:

    Can I book/buy T bills or bonds thru Zerodha mobile (Kite/Coin) APP ??

  44. suresh pv says:

    Hi ,

    Can we invest in State Govt Security like 8.73 KA SDL 2033 which is having high YTM. What is the liquidity situation .

  45. Kumar Udayan Das says:

    In Bank FD you wil get compounded interest but in bonds you will get simple interest? Am I correct?

  46. Bhargava says:

    Hi Karthik,

    Is the Bank paying 7% per FD is better or G-SEc or T-bills better?
    The government notifications for future g-sec and t-bill publish the rate of interest upfront? where can we see those details ? would like to compare the Bank FD rate of interest with gsec or t-bill rate of interest before investment..

    can you pl explain me.

    • For short term, T-Bills rates are comparable to FD.
      For longer terms, with Government bonds you can lock-in a high rate of return and continue to receive guaranteed interest payments. There are bonds available going up to 2055. With FDs you can only go upto 10 years.

      Once these bonds list on the exchange, you will also get the advantage of exiting early while FDs charge penalties for premature exit.
      You can find details for future issues here

  47. Mohit says:


    I have a query. if i am investing now in T bill 91 days. how will i get the interest and what is indicative yield ?

    • Karthik Rangappa says:

      You will be paid the interest upon maturity i.e 91 days. The yield is about 6-7%, based on the competitive bids.

    • For T-Bills, when you invest, the blocked amount is in multiples of Rs 10,000. Once the cut-off price is decided, the interest amount is credited to your account.
      For example, for a Rs 10,000(100 units) T-Bill with a cut-off yield of 7%. The interest for the period will be 1.75%. You will receive Rs 175 to your account. On Maturity, you will receive Rs 10,000(for an effective investment of Rs 9,825)
      Since the interest rate yield is only decided in the bidding that is conducted by the RBI. We display the indicative yield based on past issues.

  48. Manish says:

    Hi Karthik,

    If I am buying T Bills, will the transaction or status will be shown in coin, as it shows for the mutual funds. If we invest some amount how we will come to know that how many /quantity t bills are credit in our demat account.


    • Yes, the status will show as Processing/Allotted/Rejected. The number of units will be in multiples of 100(Face value of Rs 100, 100 units for an investment of Rs 10,000). You will also receive a confirmation email after allotment.

  49. Vivek says:

    Why does the article say that t-bills could give a return of 12.4052%? Is it an error because that’s too high

    • Karthik Rangappa says:

      It is not an error (mathematically), but yeah, I do agree that it is quite high for t-bills. Will fix it.

  50. suresh pv says:


    When we put money in equity trading account that money will use used for purachasing G Sec I suppose. Now, do the client need to mention the specific GSEC security to buy or will ZERODHA buy which is having maximum Yelid to maturity security ?. How the process of purchase of GSEC works

    Second – when we want to sell GSEC how is the liquidity situation – If we need money can we sell and get the amount within weeks time?

    Thanks & Regards

    • Karthik Rangappa says:

      1) Suresh, you will have to select the GSEC you’d want, we won’t be able to do that for you :). I’d suggest you log in here and check –

      2) NSE plans to list these GSECs soon in the cash segment, once this happens, you can sell this like any stock.

  51. Abhijeet Jain says:

    on which date the bonds will get matured,i mean on exactly after stipulated peirod or at the year end

  52. Abhay says:

    Happy to know and participate in GSec’s online – thanks for bringing this to retail investors.
    I got 7.59% GS 2026 allotted to me on 17th Oct. The e-mail from ZeroDha said auction rate was 97.98. So I was expecting to get 5103 units. Instead i got 5000 units. Could you help explain the gap please? Does ZeroDha charge 2.2% commission on GSec’s?

    • Karthik Rangappa says:

      Abhay, no Zerodha does not charge 2.2%. We charge Rs.6 for every 10K of investment. The balance money will be credited to your bank account.

  53. Manan Bhatt says:


    Is there any way by which I can indicate that I want to reinvest the interest in the bond itself?
    My understanding is “no”. But please correct me if wrong.


    • Karthik Rangappa says:

      That’s right Manas, not possible. The coupon payments hit your bank, you will have to manually reinvest this.

  54. Divakar K says:

    Recently i purchased Gsec 740GS35O18 from Zerodha terminal, I understood this is a re issue. I checked in RBI archive page to know the coupon payment dates, no luck. Is there a easy mechanism to check the payout dates from the security code ?? Any pointers in this regard is highly appreciated.

  55. Jainmiah says:

    I think stocks are better than G-Secs. Investing Rs.10000 would give you 25-35% annually.

  56. Yogesh says:

    Hello sir,I buy NSE bond future 717gs2028 at value 96.07 total 5 lot(overall 24000rs).how much interest will I get after yearly settlement? Do they calculate interest on real invested money or this future is based on margin?

    • Karthik Rangappa says:

      You will receive 7.17%*24000 = 1720.8 per year. The interest is paid on the invested amount.

      • Yogesh says:

        Thank you so much sir

        • Karthik Rangappa says:


          • Yogesh says:

            Sir I am highly interested in g security and want to hold it for 10 years. So do I need to buy each month contract like December ,January etc. ? And second after 10 year maturity will I receive 24000rs or more since I buy it below par value?thanks in advance

          • Karthik Rangappa says:

            You just have to buy it once, Yogesh. There is no concept of ‘rollover’ here. As long as you hold the bond, you will continue to receive the coupon payouts.

  57. Satish says:

    I have placed a order to Buy T-bill in Gsec, how much time it takes to process.

    • Karthik Rangappa says:

      The settlement is on a T+5 basis, request you to check this next week.

      • Satish says:


      • Satish says:

        I had placed a order to buy T-bill in Gsec on 30/10/2018, in status column message is displayed as “placed” where as in the remark column it displayed as “Order placed-pending verification”.
        Please let me know how much time it will take to execute.

  58. KAMAL GUPTA says:

    Is investing directly in G-Secs better than investing in a liquid fund (if the fund invests only in G-Secs)? if yes, then how?

    • Karthik Rangappa says:

      Yes, because the fund has an expense ratio which eats into your return.

      • KAMAL GUPTA says:

        so you are charging 0.06% at buy, is the commission same while selling at your platform?

      • KAMAL GUPTA says:

        any chance of looking at this question please?

        • Karthik Rangappa says:

          Sorry, I dont know how I missed this question, Kamal. There are two possible scenarios here –

          1) The instrument eventually lists on the exchanges and you sell via the exchange. For this case, the brokerage is not fixed as of now.
          2) You write to us and request for a sell. No brokerage here.

  59. Ravindra says:

    pls, clarify the charges charged by coin/zerodha as buying and selling both.

  60. Yogesh says:

    Sir I buy 5 lot gsec 717gsoct2028 at 96.07 invest 24000 rs.after maturity will I get 24000(capital)+39000(coupon @100)+interest? Is it right calculations?

    • Karthik Rangappa says:

      Yogesh, no you will not get 39000 as the coupon payment. The coupon rate is 7.17%, which mean you will earn 1720 per year or about 17208 over the tenure of the bond.

      • Yogesh says:

        Then what’s meaning of par value?I’m in still loss because bond future price reduced.should I sell off bond because interest profit smaller than loss actually realized?

        • Yogesh says:

          I’m confused. If I invested gsec at discount of 3rs suppose 97.will I get 100rs at maturity?what happen if I invested at premium suppose 105 shall I receive 100 par value?

        • Karthik Rangappa says:

          Par value is the face value. There is no loss here, Yogesh and there are no bond futures here. Hold this to maturity and you will get all the coupon payments. Also, please read this chapter once again.

  61. Nishanth says:

    So far it is messed up for me, team says bonds are allotted to me but i didnt got any mail from bse. I have asked for order details which is not provided yet.

  62. Sanket says:

    Hello Karthik,

    The article was really well explainatory.

    I have invested 10k in T-bills on 05-Nov
    I read somewhere in comments that to reflect the T-bills,it will take T+ 5 days.

    I am patient because of your above comment as no mails received about confirmation of my order & money is deducted from Zerodha account so waiting for your positive response.

    Can you please confirm if it will be reflected in holdings of Zerodha ?How will I get to know at what discounted value I have got the T-bills?
    Can I get info who was main bidder for the T-bills in which I have inveated.
    Also please advise if we get different discount at different time (like on Monday it is different & on Tue it is different)


    • Karthik Rangappa says:

      Sanket, the price discovery happened on 6th Nov (auction day), but the settlement is today (there were holidays this week due to Diwali). You will receive the units within the next 5 working days. Btw, you should have received the refund by now, so this will give you the buy price (auction price).

      No, we wont get to know who the main bidders are, but they will be the primary dealers recognized by RBI.

    • Karthik Rangappa says:

      Yes, 7.17% is the yearly coupon. The Bond/T-bill, upon maturity is considered extinguished and gets automatically debited.

  63. rudra says:

    Can declare this investment in Income Tax section 80C.

  64. Gaurav Jain says:

    I bought the G-Sec bond 91 Day T-Bill, the amount it is showing in my account is 9830. While amount deducted from my account is 10k.
    why this amount is deducted from my account. I heard that the profit earned on T-Bill is the discount amount, but amount deducted from my account is full.

    • Karthik Rangappa says:

      T-Bills are not bonds, they are money market instruments 🙂
      By definition, bonds are debt instruments which have a maturity period of more than 1 year.

      The difference amount will be credited to your bank account, can you kindly check?

      • Bilal says:

        Even I bought the G-Sec bond 91 Day T-Bill, the amount that is shown in my account is 9830. While amount deducted from my Zerodha account is 10k.
        Why this amount is deducted from my account. I heard that the profit earned on T-Bill is the discount amount, but amount deducted from my account is full. Also, no difference amount has been credited to my bank account as was told by you in one of the previous questions

  65. Kumar Udayan Das says:

    Dear Sir
    I have one suggestion. Why don’t you publish all the modules available in the varsity as a book and sell it online. We would like to buy that.

    • Karthik Rangappa says:

      Why so, Kumar. The PDFs are freely available for you to download 🙂

      • Kumar Udayan Das says:

        Actually i have already downloaded first three modules of the varsity, printed the same and hard binded as a book. I feel like it is more convenient way for studing the modules. So just sharing my feelings.

  66. Yogesh says:

    Thank you so much can I get information about “nse bond future”? Any Link or PDF will be helpful.

  67. Govind says:

    The profit on T-bills is STCG and taxed at 15%? Can you kindly confirm. Thank you.

    • Karthik Rangappa says:

      Govind, T-bills are bought at discount and sold at par. This appreciation is considered other income and taxed at your over all tax rate.

  68. Yogesh says:

    Thank you so much sir.what is best way to hedge NSE bond future price?debt MF or any other instrument?

  69. sankar says:

    T- bills is a great option for investment and glad that you have facilitated this. Can I sell Tbills ( 91/182/364) before maturity and if yes is the facility enabled by Zerodha?

    • Karthik Rangappa says:

      Sankar, yes, you can sell before maturity. Write to us on [email protected]. But I’d suggest you hold to maturity to reap in the full benefits.

      • Sankar says:

        Thanks Karthik. In normal course yes- shall hold till maturity.
        This to be exercised only in case of exigencies-
        Sorry to trouble you but is there somewhere I can read up and see the quotes etc – only for information sake.

  70. Puneet Gupta says:

    I placed an order for 10Lakhs Tbill 91 day – The order is showing pending for over two weeks. Please suggest?

  71. Satish says:

    I had placed a order to buy T-bill in Gsec on 30/10/2018, But still it is not executed (in status column message is displayed as “placed” where as in the remark column it displayed as “Order placed-pending verification”).
    Please let me know how much time it will take to execute.

  72. Yogesh says:

    Dear sir,what’s difference between gsec and nse bond future?will I get interest if I short one leg and long other one?

    • Karthik Rangappa says:

      Consider the G Sec as the underlying (spot) and the IRF as its futures. No interest is paid for holding futures.

  73. sanjay g. shah says:

    Can the OCI card holder purchase this bonds ?
    If YES , can you let us know the TAX implication on the returns each year and when they sele the bonds ?
    Thank you

  74. Satish says:

    I had placed a order to buy T-bill in Gsec on 30/10/2018, But still it is not executed.
    Please let me know how much time it will take to execute.

  75. KAMAL GUPTA says:

    1. Can NRIs invest in GSecs?
    2. If someone who is an ordinary citizen of India buys bonds today and becomes an NRI later, will the interest keep on getting paid into the linked bank account? what will be the tax treatment?

  76. parthiban says:

    I placed a order of 10k for t bills through zerodha gsec. Fund as been deducted from my account but it doesn’t reflect anywhere in kite as well in coin nor I got a mail from zerodha about the transaction .
    can u please help

    • Karthik Rangappa says:

      Did you place this order on 12th Nov? The units will hit your DEMAT on T+5 days from settlement. The settlement for this would be on 14th Nov.

  77. Yogesh says:

    Dear sir ,I could not find 717gs2028 bond security in coin,other bond having maturity 2020 2023 2032 etc are availability. So how can I buy 717gs2028 underlying

  78. vivek says:

    Can we pledge T-Bill and Bonds to get margin for selling options? Also what would be the applicable haircut on pledging the same, how much margin would we get?

    • Karthik Rangappa says:

      Vivek, yes eventually you will be able to do this. But for now, you cannot pledge these securities.

      • Vivek says:

        what is the approximate time frame can we expect for pledging to be active in govt securities? Are there any regulations which currently prevent Zerodha to do this?

  79. Bhargava says:

    I applied for G-SEC in ZERODHA on 30th Oct, still I did not get the update on the application. still it is showing as “Order Placed – Pending verification” in Dashboard. How long will it take to reflect the status to allotted or not allotted. ?

  80. Anurag Kumar says:


    Where can I check the coupon rate for RBI issued T-Bills.

  81. sindhu says:

    I have sent an email to [email protected] to sell my “#20181105405000 – SELL MY 91 Day T-Bill”.But no response on that in 10 days and i’m not sure if T-Bill can be sold in secondary market.I think this is my First terrible customer service experience with Zerodha. Appreciate quick response and resolution.

    • Karthik Rangappa says:

      Will look into this, Sindhu.

      • Sindhu says:

        My issue has not been resolved but my ticket has been closed with out any proper comments.
        Can you answer my question ” if T-Bill can be sold in secondary market”????????

        • Karthik Rangappa says:

          T-Bills are not listed in the secondary markets, yet. The exchanges are working towards making this happen. No timelines yet. Meanwhile, if you want to sell, please write to [email protected]

          Also, please do share the ticket number. Thanks.

  82. Vikas Barhate says:

    I have ordered 300 units of 91Tbill on date 13/11/2018 and same I have got it @ re 93.31
    Hence I am getting ytm yield of 6.895%
    You are charging brokarage of rs 6.96 per 100 unit which is at quite higher side and the ultimate yield is reduced to 6.605%
    I am senior citizen and my bank is giving 6.25+0.5=6.75% interest on fd
    So purchase g sec through is costly dur higher brokerage charge
    So request pl reduce the brokerage charge

    • Karthik Rangappa says:

      Sir, 91day T-bill was at 98.3 and not 93.31, also the brokerage is Rs.6 per 10K Sir. How much more do you want us to lower the rate?

      • VISHAL says:

        While you suggest us to Invest in T-Bills because it gives a better return than FDs. And you give comparative figures of yield on T-Bills/Bonds and FDs (which serves us better to compare and take the decision. That is a good thing and I really appreciate you for that). But while you give us the comparative yield figures, there is a catch, you don’t account for the cost of Investment (brokerage, fees) and Banks provide quarterly interest compounding on FDs which increases the actual yield on FDs. A word of caution regarding the cost of investment and other things would help investor better in judging the investments and taking the decisions.

        We don’t expect you to lower any fees or brokerage but we expect you to account for these things while providing us the actual yield information.

        • Karthik Rangappa says:

          Vishal, the transaction costs are clearly mentioned on the home page –

          • Savitha says:

            I Agree with Vishal

            I had ordered 2200 units of GSEC 740GS35N18, at INR 9027 per unit amounting to INR 1,98,594.00. I understand INR 148.87 is brokerage at 0.06% of INR 1,98,594.00 + GST. Now I see an extra amount INR 11,679.65 being deducted today. Why is this deducted? If this is it, please explicitly declare this in your Documentation explaining GSEC else investor gets misguided(that actual price we investor pays will be known only after alloted , and the indicative par is no longer valid, why would I invest 7.4% if I dont get the par value!!), that what we order and what can be deducted is different. Unreliable to order the units if I dont know how much it is costing me!! Absolutely Crazy for making in informed decision, not investing in this BS anymore

  83. aditya says:

    20-Nov-18 22-Nov-18 7,000 –> 91 days

    Currently no issue open. Bidding opens again next Monday.
    WHY ?
    Im looking at short term g secs as I need liquidity .

    • Karthik Rangappa says:

      The bidding for T-bills is on Monday/Tuesday and Tuesday/Wednesday/Thursday for G-sec.

      • aditya says:

        if you noticed it is still a tuesday when i mentioned. i wish i could post a screenshot. but i cant.
        take your time and look into it. I wish i got a more detailed answer.

        • aditya says:

          I just wish coin had a total charges calculator so that people knew how much money they need for an investment into bonds/t bills.

          So just for my information and others as well , please work out this example:

          a 91 day t bill offered at a hypothetical value of 9821 for a par value of 10,000.

          please calculate all the charges(GST, STT whatever that may be applied onto this.)
          and the final amount credited at maturity .

          I will do my income taxes on the final value.

          looking forward to your reply.

  84. Shivom Sehgal says:

    Please tell me why I shouldn’t invest all my money in t bills rather than bonds or stock market because there are two reasons I think makes it a genuine choice
    1. It has less period of completion so I will not be charged tax for LTCG and thereby better than a bond investment
    2. It assures me that my money wouldn’t go down because as you said buying a t bill is like buying a stock for 97 and then selling it for 100 at the time of completion so it makes it better than the stock market.

  85. Makrand says:

    So 6 Rs for every 10K is brokerage. Got it.
    What about the taxes (STT or GST etc) for purchase transactions?
    Also, if one decides to sell his Tbills/Bonds before maturity, brokerage/taxes still applicable? It would make more sense if you create online calculator where one can find the final maturity for T-bills & bonds.

    • Karthik Rangappa says:

      We will put up a brokerage calculator for this sometime soon.

      • Makrand says:

        BTW, why would one email you to sell? can I sell it myself on secondary bond market like usual stocks/ETF we sell on NSE/BSE?

        • Karthik Rangappa says:

          Email because we will act as counterparty till the time exchange lists these securities in the cash segment.

          • Makrand says:

            1) Any idea when exchanges are officially going to list it in cash segment for retail investors?
            2) Safe to assume the liquidity in the proposed segment/market is going to be ZERO/insignificant initially?
            3) If you’re going to honor all the sell requests by your clients? How do you discover the price of sell in that case? Most important of all – do zerodha honor all the sell requests submitted by clients?

          • Karthik Rangappa says:

            1) 17th Dec is the expected date
            2) Market making is allowed, so I think there should be liquidity
            3) We would take quotes from other institutional participants. However, this is no longer required as the product is listing on the exchanges and the pricing would be market driven.

  86. Vivek Joshi says:

    1. In case we want to sell Tbills, What is expected timeline for receipt of funds?
    2. Brokerage of 0.06% on 90 day tbills is insanely high..Zerodha we are used to low fixed fee:)
    3. 90 day T bills will be short term capital gain, right?

  87. Makrand says:

    Have a look at RBI press release for 91 T-bill auction for today –

    The numbers for non-competitive bids are very interesting . Total bids received are 8 worth ₹ 14,801.465 crore. huh?
    If retails investors are mostly allowed in NCB, how is the amount so high? Or may be they want to say 14.8K?

  88. Nishant Kumar says:

    Hello Karthik Ji,
    My concern is about the taxation. Let’s say by trading stocks I made 15% i.e Rs.6,00,000 in 6 months.
    Now I put all of the 6,00,000 in a Tax Free government security of 180 days . After that I do not do any transaction for the Entire Year.

    So what will be my tax liability for the year assuming I have no other income sources.

    Will I be charged for LTCG on my Trade or can I omit LTCG since I invested all the money in a Tax Free Bond.

    • Karthik Rangappa says:

      Nishant, there is no tax-free Govt security maturing for 180 days. You will have to pay STCG on this. I’d suggest you please speak to your CA on this. Thanks.

  89. Nishant Kumar says:

    Hello Karthik Ji,
    I have another question. So as we all know that we are liable to pay 15% STCG & 10% LTCG.
    Is there any way by which we can omit the taxes may be investing our Gains in any Tax Free Bonds.

  90. Parag says:

    Hello Karthik,
    Please help me with this. I have short-term capital losses for a year from Equity shares. Can I adjust this short-term capital gains from Treasury bills?

    • Karthik Rangappa says:

      Yes, Parag. You can do this.

      • Parag says:

        Thank you for answering the query.
        However, I have drawn some inferences and need your endorsement on the same.
        1. The article mentions “T-bills – You buy at discount and sell it at par. This appreciation is considered as short-term capital gain, and taxes as is per the applicable slab rate.”
        This means this STGC will not be taxed at 15% (unlike STCG tax on sale of equity shares) and will be taxed as per my tax slab. Correct or Incorrect?

        2. Are T-bills and Zero Coupons bonds the same or T-bills is a type of Zero Coupon bond?

        3. In many sources of information, the appreciation in T-bills is considered as interest income? If that is correct will I be able to set-off losses from equity shares with gains from T-bills? It will be Capital losses vs Interest income. Doesn’t seem correct. Can you please help me with this conundrum.

        Thanks in advance

  91. aehsan4004 says:

    The price we pay is decided by the MAJOR BANKS & FINANCIAL INSTITUTIONS.
    a) So, when we buy via COIN, is that price decided by ZERODHA ?

    b) what are the criterias & procedure for FINANCIAL INSTITUTION to be able to bid directly on RBI auction portal ?

    • Karthik Rangappa says:

      a) Remember, this is non-competitive bidding for retail, we just collect bids and place the order with the exchanges.
      b) You need to be a bank or RBI approved primary dealer

  92. Hardik says:

    Allotment price of very recent Bond 8.24% Government Stock, 2027 is 104.49 RS for Non-Competitive Bids.
    So per value of this Bond is 100 or 104.49?
    if per value is 104.49 then interest rate is not 8.24, right?

  93. Shankar says:

    Can G-Sec able to pledge. If not when this will be available.

  94. saikat says:

    besides 0.06% brokerage, do you charge demat transaction fee for T-bills?

  95. Pramod Azad says:

    can we decide which g-sec bond I would like to buy. say can i buy 737GS2023 and not 662GS2051..

    because when I goes to ‘Start Investing’ Link given in Coin, i cannot find any such option to choose.. am i missing something

    • Karthik Rangappa says:

      Pramod, whatever is available for bidding is what gets shown on Coin. If there are no issues, then you won’t see this.

  96. Sai Rikwith says:

    I am new to the stock market
    can i invest in G-secs with just an amount of 10,000 rs.

  97. sridhar d says:

    Just like other users experience in comment section, I placed a G-Sec order and deadline is passed, but I still see the following status: “Order Placed – Pending verification.” Could you elaborate what this status means?
    Also it would be good to describe it in this chapter (even, if this is specific to Zerodha workflow).

  98. Anurag says:


    Please provide T-bills calendar for the quarter JFM 2019

  99. Shiva Goyal says:

    hey, It’s my first time to purchase a T-bill as i placed the order my status to that order comes with a remark ” Verification pending” may i know what does that mean? and is there something which i can do?

    • Karthik Rangappa says:

      Shiva, the order will be placed on T+2, until then its the collection period. Hence the ‘verification pending’ status.

  100. aehsan says:

    Do we get any 80c benefit or some other tax benefit when we invest in G-secs or T-bills ?

  101. NARESH says:

    kindly advise in which bond or T bill, we can get monthly interest . Like FD
    or advise best scheme with govt guarantee in which we get monthly interest instead at the time of maturity.

    • Karthik Rangappa says:

      No bond pays a monthly interest, Naresh, at best bonds pay semi-annual interest. The semi-annual payments are made by the Government bonds.

  102. Ashwin says:

    If I hold 10 years bond, can I exit in 2 months? What will be the interest I gain if I sell and what would be the other charges involved?

    So instead of holding T-bills I can hold bonds instead and sell as I wish correct? Then why would anyone buy T bills.

  103. Rohit Saluja says:

    Hi Karthik,

    Hope you are doing well!

    Firstly, I would like to thank you for replying to all your the queries asked above. Having said that let me bother you by asking another question

    It says that the bond interest is paid semi-annually and will be credited back to the associate bank account, So is there any feature available using which I can configure as to automatically invest the interest received back into the bond?

    Rohit Saluja

    • Karthik Rangappa says:

      Rohit, unfortunately, that option is unavailable for now. You will have to manually do this for now.

  104. John Sunil says:

    I’m trying to bid for 91 day T-Bill today (04/03/2019) – Monday, it’s saying there are no issues today, try again next Monday. What it means??? Could you explain!

  105. Sumanta Basak says:

    I have bought 100 units of 8.24% GS 2033, I have to pay 11581 rs , I think its contains the 0.06 % charges . But at this moment the amount is showing 10,666.96. why there is a difference

    • Karthik Rangappa says:

      The difference amount will be known when the final offer price gets discovered by the bidding process. The balance amount will be credited back to your account.

  106. Ragu says:

    For TBills, your brokerage is ₹6 per ₹10000 investment, that is for 91 days. This works out to be ₹24 per ₹10000 per year. This is quite close to expense ratios of actively managed debt funds. So zerodha brokerage seems very expensive in case of TBills.

  107. Sri says:

    Can you please explain indicative yield? What is it’s purpose?
    I see an issue 8.24% GS 2027 open for bidding now with an indicative yield of 7.49%. Does this mean I will not get 8.24/2% semi-annually and only get approximately (based on the bid) 7.49/2% semi-annually? If my understanding is incorrect, what exactly is indicative yield? Thanks!

    • Karthik Rangappa says:

      Indicative yield is to help you get an understanding of earning potential (in % terms). Here, 8.24% is the coupon rate (paid semi-annually, so 8.24%/2)…and 7.49% is the capital appreciation in the bond itself.

      • Sri says:

        Thanks for your reply. I understood the coupon rate part but not the capital appreciation part.
        Could you please explain how the capital appreciation works for a bond lets say 8.00% GS 2029 indicative yield 7% (10 year bond for example) and tell me what I will earn semi-annually and what I will get at the end of the bond when I invest Rs. 100000 now.
        A detail of the calculation will help as well.
        Another request, could you please build a bond calculator as well if time and resources permit.

        • Karthik Rangappa says:

          Lets say, the face value of the bond is 10K, you’d pay 7.5K for it today…but upon maturity, you will get back the face value i.e 10K. So there is a capital appreciation here, and this is what the indicative yield suggets.

          If the coupon rate is 8%, then you’ll get 4% every 6 months, this is semi-annual coupon payment.

  108. John Sunil says:

    Dear Karthick,
    I have placed a T-bill order this Monday, the amount related to it has been deducted from my account. I’m yet to receive its transaction details via mail/ any communication . Meanwhile kindly help me out to track the same in coin app( as navigation in coin is not easier for me) since I have been trying hard.

  109. Sundeep says:

    Sir how do I buy Corporate Bonds/ Debentures through Zerodha platform? Where can I find the list of Debentures that are currently available for subscription?

  110. Aman Bakshi says:

    Bonds ko maturity sa pahla sell kr skta hai….???

  111. Soumitra Dev Burman says:


    When I read through the G-sec doc T-Bill section, I find the following:

    “What happens upon maturity of a T-bill?

    Upon the maturity, the Government debits the T-bill from your DEMAT automatically, this is called ‘Extinguishment of Securities’ and the par value gets paid to the bank account linked to your DEMAT account.”

    -So, once the 91 days are over and my T-Bills are matured, all the mentioned process will be happening automatically? Or is there anything should be done from my side?

    And, what is the Brokerage amount Zerodha charges for G-sec transactions?

    • Karthik Rangappa says:

      Yes, that happens automatically. Brokerage is 6 paisa….so about Rs.6 for Rs.10,000/- of investment.

  112. Maheshwari says:

    Dear Zerodha, any update on pledging the G-Secs?
    We have been waiting for it since a long time….
    Please give it a priority

  113. Subhendu Bikash Roy says:

    Dear Zerodha,
    I buy 100000 G-Sec 20 yer 8.34
    interest withdrawal yearly basic ?

  114. Sai Vinod Kumar says:

    For This Bond 7.26% GS 2029 can i know how the indicative yield is higher than bond coupon if the bonds is trading at Premium (105.5)


  115. John says:

    Please clarify this for me:

    Imagine i have taken and got allotment worth Rs. 5Lakhs on Goverment Securities at ROI 7.5% for 20yrs. Now if RBI cuts Interest rate at 7.25% during 2nd year, will my allotted securities ROI also changes or will it remain the same like in Fixed deposits ?

    • Karthik Rangappa says:

      The coupon rate will remain the same, the yield however will change. But if you intend to carry forward this position till its maturity, then you need not have to worry about this.

      • John says:

        Thanks Karthik for replying, can you please Elaborate this part with figures to understand better.

        • Karthik Rangappa says:

          Which part, John?

          • John says:

            I need to know like i invest say about 10 Lakhs for 20yrs, what will be my semi-annual returns if at all there is a drop in ROI on 2nd year and what if the drop in ROI continues down the line, say for 3rd year, 4th year….so what will be the effective Returns that is been paid to me (semi annually) under these circumstances ?

          • Karthik Rangappa says:

            The semi annual return depends upon the coupon rate of the bond. So for example, if the bond has a coupon rate of 8%, then you are entitled to 4% every six months. Bonds are capital protected (you can check the ratings), and if you hold for complete 20 yrs (called held to maturity), then there is no problem with drop-in ROI.

  116. Somnath says:

    Will 772GS2055P (7.72% GS 2055) be available for further allocation ?
    It last available on 15-Apr-2019.

  117. Rajat says:

    Don,t we use par value to calculate intt. On yearly basis while calculating for treasury bill.
    Coz i studied during my CFA studies that the formula is discount/par value × 360/n !!!

    If anyone could answer that would be great.

  118. Javid Ishraque says:

    Can you all please start a chapter on corporate bonds or NCDs. Like how to analyse and all and most importantly where do I find the prospectus of old bonds.

    • Karthik Rangappa says:

      Yes, Javid. I’ve been wanting to do this. Guess it will be a part of the next module on Personal finance.

  119. Soumen says:

    After reading this: Every bond has a Par value, of say Rs.100. When you invest in a bond, you usually invest either at a discount (ex: 98, 97 etc) or at par (100), or at a premium to par (101,102 etc). The price at which you invest in a bond depends on something called as an ‘auction process’.

    Is there any way to participate in buying bond only for the discount price? I do not want to buy a bond premium or at per price. Could you please help!

  120. Bhisham says:


    Bond ko maturity date se pahle sell kar sakte he? or sell karne pr interest milega jitne time ke liye hold kiya gya he?

    • Karthik Rangappa says:

      Yes, you can sell the bond before expiry. Yes, you will receive the interest for the period you held the bond.

  121. Soumen Sen says:


    Today I had place order for
    Sec name: 7.63 % GS 2059
    Maturity date: 17-06-2059
    Initial Amount Block: 1,01,556.

    I’m not sure whether I will get the bond either discount price or Premium price until the allotment process/auction process is complete.

    For Example, if the final amount is the same as Rs. 1,01,556, do I get back in the maturity full amount of Rs, 1,01,556 ? or there is still a chance to get a Capital Loss due to Premium? Also, Do I get interested twice a year on Rs. 1,01,556 as well?

    Please reply as earliest possible, so I can cancel the bid I place for if there is any change to get “Capital loss” due to Premium or any reason on the Maturity time, I never mind whether G-sec allotment me a discount or at a premium price until there is no change to get capital loss. I need back the entire amount in maturity I’ll pay.

    • Karthik Rangappa says:

      The additional amount is towards the accrued interest payable to the previous bondholder. On maturity, you will receive 10L. You will receive the interest twice a year on 10L investment.

  122. Soumen Sen says:


    For example, I am paying Rs, 1,01,556 I will get back of Rs. 100000 as well I will get interested twice in the year on Rs. 100000

    upon Invest the amount of Rs. 1,01,556 and I will get back of Rs. 1,00,000 . So here I will lose my Capital of Rs. 1,566 am I right or wrong?

    Please clear me if I misunderstand it! I UNDERSTAND IF I BUY THE BOND I WILL CAPITAL LOSE OF RS. 1556

  123. Soumen Sen says:

    Sir, I understand about “accrued interest” Thanks for the information.

    Now, consider you invest in 700GS2020 (7% with a maturity of 2020 or 2 years from now) at a discount price of 98.4. Assume, you invested in 150 of these bonds, so you’d pay –
    = Rs. 14,760/-
    So on an investment of Rs.14,760/- you will earn –
    525 + 525 + 525 + 525 + 15,000
    = 2100 + 15,000
    = Rs.17,100/-
    If you do the math, the yield on this works out to approximately 7.88%.

    I understand from the above-given illustration an investment Capital of Rs.14,760/- I will get Rs. 15,000/-. Which is treated as a Capital Gain of Rs. 240/- (Please correct me if I wrong)

    I am quarrying about! I am not aware in advance at what price my trade will get execute as because it’s out of my control for something called as an ‘auction process’ if my trade gets to execute at a Premium to par price of 102, how do you calculate the yield on that scenario?

    Can you give me an illustration with the below-given detail to help me understand how much I earn or “capital Lose” if I were to invest in a bond?

    Now, consider you invest in 700GS2020 (7% with a maturity of 2020 or 2 years from now) at a premium to par price of 102. Assume, you invested in 150 of these bonds.

    • Karthik Rangappa says:

      Soumen, assume the face value of each of these bonds is 1000, which is trading at 1020. So you are buying 150, of these, which means you’ve invested 150*1020 = 1.53L
      You will earn an interest of 7% on the face value i.e 7%*1000 = 70 every year per bond or 150*70 or 1050 in all, per year. Upon Maturity, you will get the principal back, which is 1000*150 = 1.5L. So essentially, you are paying upfront today for future cash flow.

  124. Shailesh says:

    Karthik still not convinced.
    it seems that we ll loose capital amount as sais by soumen

    • Karthik Rangappa says:

      Shailesh, how would the be possible? You’d be getting interest payouts right? By the way, yes, you will lose money only if you are paying a price which is far higher than all the cash flows put together.

  125. Soumen Sen says:

    Karthik Thanks for your quick and prompt response. Could you please tell me what is the face value for this G-Sec: 7.63 % GS 2059

    On the above-given illustration, I understand Paying an upfront amount of Rs. 1.53L for the future cash flow of Rs. 1.50L ( I believe this called “Capital Loose” at least I will treat it’s a “capital loss” of Rs. 3000). Still, It’s a good deal for me fixed income products upfront of 2% extra. Lock in attractive interest rates for 40 years. But I need to know the maximum upfront amount which I need to pay for the G-sec for any condition.

    Kindly reply flowing:

    Q. (1) Retail investors are unaware about the trading price/Final price they have to pay for the bond until unless the bond allotment process complete & final payment deduct from there account am I right?

    If I am wrong please let me know how do I know the trading price of the bond before final payment deducts from my account so if the price is not my favorable I can exit from the position for the bond?

    Q. (2) How safe it for the retail investors that the bank and financial institutions are not “hugely manipulating” the price and “forced” to pay higher premium retail investors on the face value of the bond? Because of the retail investors can’t have to choose the price they want to buy before the execution of the trade.

    Q. (3) Is there are any upper Circut and Lower Circut on the face value of the Bond? It can be at least one “safest point” for retail investors to know in advance they will not overcharge for any condition higher than upper circuit price while they buying the bond.

    And for lower Circut price if any who want to exit before maturity at least they will not force to sell lower then the lower circuit of the bond.

    In all the way I need to know how much I am paying upfront today for the future cash flow of Rs. 100/- also, the upfront amount should not “Huge Manipulate” force to pay me! at least I must know I shouldn’t pay more than a certain amount which means to say an upper limit/upper circuit time of buying of G-sec & Should not get less than the amount of Lower Circut time of selling before the maturity.

    • Karthik Rangappa says:

      1) Yes, this is right. Retail participants are price takers. The amount blocked should give you a rough indication of max price. I’d suggest you take cues from that
      2) Retail participants are a tiny fraction in the GSec market, so don’t worry about that :). Also, unlike stocks, pricing bonds is very straight forward, hence it is hard to manipulate bonds
      3) No, there are no circuits.

  126. Srinathjayanna says:

    Sir how to invest in Nifty 50 ETFs and is there any study materials for ETFs.

  127. Prashant vyas says:

    Is it possible to short sell bond future….I mean to say that like stock future can we trade it on day to day basis?

  128. Anil says:

    Is there any option in bonds like, I can reinvest the interest received thus making the return compounded.?

  129. Anil says:

    What about the Corporate bonds like the bonds from PSUs. We can see lot of news every day like “REC has decided to raise 5000 crores through bonds”. How the auction of these securities are taking place? Are retail investors allowed to participate to buy fresh issue of these bonds? I mean before getting listed in the secondary market.
    Moreover If we see the coupon rate of the high rated PSU bonds, they are far better than the G-Sec. Since the default risk of these companies are very low, why can’t we choose them instead of G-sec? It would be grateful if you can create a chapter which describes all other fixed income instruments like Corporate bonds, NCDs etc and investment strategy to diversify the funds among these instruments.

  130. Anil says:

    Thanks for your reply. Looking forward to read the chapter..

  131. Sunil Gupta says:

    Thanks a lot for making us aware about Central Government Securities. RBI is also conducting every Tuesday State Government Securities though that is not as liquid as Central Government Securities in secondary market, but interest rate is higher than CGS. It is good for Senior Citizens or those who are dependent on interest income .How to purchase the same from Zerodha Portal.? Please guide.

    • Karthik Rangappa says:

      Suni, at the moment only the Central Govt bonds and bills are available. Will let you know when the state Govt bonds become available.

  132. Anil says:

    Hi karthik,

    I have seen that certain bonds are currently trading below their face value in the secondary market. For instance SREI Infra – YK series bond of face value 1000 is currently trading at 800 Rs. So does that mean, if I buy this bond at this price and hold till maturity, I am securing a return of 200RS per unit plus the coupon rate based on FV every year ?

  133. Anil says:

    Thanks for the reply Karthik.
    Could you please explain the possible reason for these bonds to trade below the par value. Most other bonds are trading above their FV. Moreover these are AA+ rated bonds.

  134. Keshav says:

    Sir, can we pledge the bond in zerodha to get margin?

  135. ZKAR says:

    Is there Cumulative option while imvesting for Govt Bonds. Pl. clarify.

  136. SENTHIL KUMAR says:


    Today I tried to make the G-secs order. But I confused that 7.63GS2059- 1000 Units – order value is 1,13,810. i.e. I am paying 13810/- as a premium sir Same I tried for 7.26GS2029-1000 Units – order value is 1,11,110 i.e. 11110/-extra as a premium.
    1. Base price is Rs.100/- then this premium of 11 or 13 rupees, How I will cover? it means my 1.5 years interest is gone for the Premium?

    Please clarify.


    • Karthik Rangappa says:

      Senthil, the exact price will be known after the bidding, the excess, if any, will be refunded to your account.

  137. Senthil Kumar says:

    Thank you very much sir..

  138. Eshan says:

    Hi Karthik,
    I am currently invested in Gilt funds but due to decline in NAV of gilt fund from the date purchase my principal amount is also reduced. Under what circumstance does NAV of gilt fund decreases? Do you have a separate module on Mutual Funds?

    Thank you,

    • Karthik Rangappa says:

      Eshan, these are interest-rate sensitive products. Change in the interest rate or the perception that the interest rates are likely to change, then the NAVs change. The current ongoing module on Personal Finance will include a mini-series on Mutual Funds.

  139. Eshan says:

    Sorry if I am not posting my follow up comment in the same thread (didn’t see that option). My dumb brain thought that Gilt fund manager will just purchase Bonds and T-Bills and then just sit, collect interest and distribute it among stakeholders. Is the fund manager trying to trade Bonds and T-Bills in the secondary market? If I am investing via, will it be similar to FD where my principal will not get eroded by interest rate fluctuation?

    Thank you

    • Karthik Rangappa says:

      Eshan, so there are 2 categories of gilt funds. There are constant maturity funds which maintain a constant duration of 10 years. The normal gilt funds, they trade the interest rate cycle.

  140. Sulabh says:

    1. Can’t find live gov bonds as on date anywhere on zerodha coin. Just a link that say they will be shown here. Cud only find funds with Gsecs .
    Why? Karvy is saying you can invest now !And 2. where are they traded today ? How can I buy a running bond already issued

    • Karthik Rangappa says:

      1) Check this – . If there is a primary issue, it will show up here, else if its already traded, then you will have to see it on your Kite Market watch.
      2) Don’t know about Karvy, but on Zerodha, look up on the Kite platform.

  141. samir ranjan pal says:

    I had noticed this mentioned somewhere ,however can not find it now. How is the purchase of G-Sec units uploaded into my portfolio in Zerodha .
    The entry in the portfolio is showing up as error —- Holdings with discrepancy

    • Karthik Rangappa says:

      Hmm, this is not really an error. It means that the units do not have a purchase price and you need to enter them manually. Can you create a ticket on this Samir? Thanks.

    • Nakul Kulkarni says:

      Hey Samir, we’re having this checked. Will get it fixed soon.

  142. Samir says:

    Thanks for the prompt reply.
    However on this note all users should have an inbuilt error/problem addressing system in place which is fail safe.
    so as to cut out a lot of exchanges.

  143. jagadeesh says:


    thanks for illustration examples of T-Bills and bonds
    I’ve few queries

    1. can i invest GSEC bonds on Automatic SIP mode?
    2. is there any GOLD bonds which will give more returns due to appreciation in gold rates (may be for long term say 10 years)?
    for example, lets says gold rate is 35000 per 10gms, and i want to invest 10000 per month for 10 years and at the end of 10th year, gold rate might be 70000 per 10gms. almost double in 10 years. if the appreciation in gold value is not transferred to customer then who is getting benefited here?


    • Karthik Rangappa says:

      1) Hmm, unlike MF units there is no guarantee that the GSec issues would be available all the time. Hence this may not be possible
      2) You can invest in both Gold bonds and ETFs, you will get the benefit in capital appreciation in both these instruments

  144. Kans says:

    Hi Karthik,
    It has been observed that the listed G-Secs are not tradable in Secondary market in Zerodha.(other than scheduled auctioned securities)
    Could you please open it for trading? Members participation will enhance the liquidity…

    • Karthik Rangappa says:

      The issue is with the inter depositary settlement. We are looking into it. By the way, there is literally no liquidity for selling these instruments on the exchange.

  145. GANGADHARAN Mani says:

    Hi Karthik,
    I have a question on auction of G-Sec. In the yield based auction. The RBI determines the cut-off yield as 8.22%. How the corresponding prices are calculated? The price for the bid at 8.19% is 100.19, the price for the bid at 8.20 is 100.14 & 100.13 at 8.21 it is 100.09. The price for cut-off yield of 8.22 is Rs. 100.(pls see below)
    Could you pls explain the methodology.
    1 8.19% 300 300 100.19
    2 8.20% 200 500 100.14
    3 8.20% 250 750 100.13
    4 8.21% 150 900 100.09
    5 8.22% 100 1000 100
    6 8.22% 100 1100 100

    • Karthik Rangappa says:

      Hmm, frankly I’m not sure about the auction methodology, but I think these bids are market-driven. Bids are placed by the participating agencies and the final price is averaged out.

  146. AGS says:

    Any update on the purchase of State securities through Zerodha?

    Many thanks

    • Karthik Rangappa says:

      SDLs aren’t allowed in DEMAT mode yet, but will soon be. They will soon be listed as well. You will be able to buy/sell directly over the exchanges.

  147. Venkatesh says:

    Hi ,

    I have 2 basic questions, where my money should available when i try to buy

    1. To start a G-secs bond via Zerodha, should i have amount in Zerodha – Equity account or My Primary Bank Account ? (where it should be when i try to auction it)
    2. If say auction price came to 98 and i did paid 100, the very next trading day when G-secs is executed, remaining 2 will be paid back to which account.

    Many Thanks

  148. Nishanth says:

    You cannot sell this from secondary market like any other holdings, this is what i came to know form zerodha support team.

  149. Raviteja says:

    I have seen two fields named “Indicative yield” and “Unit Limits” in the T-Bill session.So can someone explain me about those and provide an example ??

    • Karthik Rangappa says:

      Indicative yield is the likely yield you are expected to get at the given price of execution. Unit limits are the maximum value you can bid for. 2 Crs if I’m not wrong.

  150. mayank says:

    Invested in T-Bill 91 days and the price was 100 INR , when I see the auction data on RBI site it seems the value is set to 98. Now I invested 10000 INR, so do I get the amount credited back in my account as price for set at 98.05 ( around 200 INR)?

  151. venkat says:

    I invested recently in G-Sec ( GS6170312A) maturing in 2021. My account debited for 10900 INR. The bond in my Demat account shows for 10000 INR.

    When I checked on why being charged 10900 when G-Sec credited in demat shows 10000 INR.
    Its like:-
    Allotment price was = 100.59*100 = 10059
    Commission+GST = 7.08
    Accured Interest = 246.8
    INR 587 was credited back to my bank account.

    if i see for G-Sec I paid (10059+7.08+246.8=10312.88).

    Can you please help in understanding what this Accured Interest part is? Why is it being charged to buyer? Will he get it back that on maturity?

  152. mayank says:

    I got T-bill credited in my Demat on Dec 12, 2019. When can we expect the amount to be credited back T+? days.

  153. Raghu says:

    I have recently invested in G-Sec 617GS2021. With an yield of 6.17%. I was however allotted at a price of 107.15 on a face value of 100. Essentially, I have paid a upfront premium of 7.15% on a yield of 6.17%, which I am going to get later. The time to maturity of the G-Sec is 1.5 years away. Hence I will get payment of 3.08% every 6 months. My return calculation is as below:

    Invested amount: 1,00,000 * 1.0715 = 1,07,150
    Time to maturity: 1.5 years.
    1st payment July 2020 = 3,080.
    2nd payment Jan 2021 = 3,080.
    3rd payment July 2021 = 3,080.
    Total payment received = 9,240.
    Maturity amount at July 2021 = 1,00,000
    Total capital = 1,00,000 + 9,240 = 1,09,240
    Invested capital in Dec 2019 = 1,07,150
    Net earning = 2,090.
    Effective rate of interest is less than 2% per annum.

    My question is: How is this better than Fixed Deposits? I guess I need to trade my G-Sec at a higher rate ASAP. I will lose out big time if I hold this to maturity. Or am I missing something here. I am so disappointed that I fell for the promotion in G-Sec screen in COIN. Please give a correct picture. Please tell investors in G-Sec that it is possible that you will make a loss if your allotted rate is at a premium much higher than the coupon value. I have checked the coupons on recent G-Secs, almost none of them are higher than FD rates (I am comparing ICICI bank rate, which is not the highest in the top banks). You must get the G-Sec at a discount, only then will you beat the FD.

  154. Bhuvan says:


    You would have received the accrued interest that belongs to the previous holder. If you use the YTM calculation you can find the actual yield and you can compare it to the FD rate of a similar maturity.

  155. venkat says:

    Raghu, did you check on Bhuvan’s point? Even I had invested in G-Sec (refer my query above to your query). Your analysis can be helpful for us too…

  156. Abhijit Debnath says:

    I’m a registered Zerodha trader. How can I apply for T-Bills & Govt. Bonds through Zerodha trading platform. Kindly guide me. Thanks

  157. lovelesh says:

    I would like to know how can i purchase tax-free bonds from HUDCO, NHAI, IRFC as fresh issue.
    If fresh issue is not available, is it worth to buy bonds from stock market?

    I could only find G-Secs on coin webpage.

    • Karthik Rangappa says:

      There haven’t been any fresh issues for a while now and there isn’t much liquidity in the secondary markets. However, we are working on enabling our clients to invest in these tax-free and taxable bonds pretty soon.

  158. Arjun says:

    If i buy a 91 day T bill, can i roll it over on maturity? Else i will end up paying tax on interest, If i invest in overnight funds (MF) they buy T bill but after 91 days i am not obligated to pay tax on interest earned, its only at time of redemption that tax liability raises. is there something similar in T bill, where tax obligation doesnt arise until i actually get that money into bank account and an option to rollover a tbill of 91 days to the next 91 day period?

    • Karthik Rangappa says:

      Arjun, no if you buy t bills directly, then you are liable to pay taxes on the interest. The structure is different for funds though.

  159. Binay kumar says:

    If I buy an old GS which is listed on NSE and the maturity date is 2046. so the interest and my investment will be considered from 2020 and interest will be paid according to that. And the price it is showing is 86 that means it is currently traded at 86 Rs…..

  160. Sahil says:

    I would request you to make a complete video on this……both the auction process and trading in secondary market in kite…and how money will be recived in both cases….Thanks

  161. akshay naik says:

    Hello karthik sir,

    I purchased 870gs2021 at 89 from nse at 28 feb and then they are not delivered on t+5 days.So i created ticket and i got following reply.

    Sorry for the delayed response, Please note that Inter-Depository Transfer for Central Government Securities, State Development Loans and Treasury Bills will be permitted for the minimum quantity of 100 units or multiple thereof. In your case, you have purchased 55 quantity which are credited to our NSDL pool. As direct Inter-Depository Transfer restricted from RBI we are unable to settle them, Hence we are using value-free transfer method to settle those units, We will be settling the transaction by tomorrow.

    sir can you tell me how many days take to settle transaction by value free transfer method?

    • Karthik Rangappa says:

      Akshay, so this is what has happened –

      1) You bought these units from the secondary mkt
      2) The seller of these units seems to have an NSDL account
      3) The seller’s broker debits the units from the seller’s NSDL account and credits the same to the broker’s NSDL pool account
      4) Clearing corp debits the seller’s broker’s NSDL pool account and credits Zerodha’s NSDL pool
      5) Zerodha, in turn, cannot debit its NSDL pool and credit your CDSL DEMAT as this is not permitted by RBI. Note, this is the inter depositary transfer.
      6) To process this, we will have yo REMAT your units and simultaneously DEMAT that to your CDSL account. This is the value-free transaction our agent is talking about
      7) As such, this is a time-consuming process, but given the current day circumstances with Yes Bank, this make take up a little more time.

      Our team will do this, please give them a little more time. Thanks for your understanding.

  162. Vinod says:

    Dear Zerodha Team,

    I cannot see any GSecs or T-Bills for purchase now. Is there some issue or has the government stopped offering the securities due to the current situation?


  163. Prashant says:


    I am interested in buying GS bond from secondary market. I can see that kite is listing something as “813GS2045-GS”. I guess this is a Govt Security bond fund which means its coupon rate is 8.13% and maturity is year 2045. Is that right ? Though I don’t know why GS is repeated at the end of this script. (I am only aware of what A means).

    Can you please tell what does the script ending with -GS means. Its current price is shown as Rs. 84. Can I assume that it’s par value is 100 Rs.

    Am I not getting it at discount on secondary market? Could this be a good deal if I am willing to stay with this bond for 2045. Also, what all cost I have to bare apart from Rs. 84 ? Is this the price per bond? Please clarify.

    • Karthik Rangappa says:

      GS stands for Government Securities. Although G-secs are listed on the secondary markets there is absolutely no volumes. If you open the marketdepth of the security, you’ll notice that the last traded date of this bond is March 31st. Hopefully, this should improve over time. For now, you can purchase G-secs on Coin when they are available fro bidding.

  164. Prashant says:

    Thanks Karthik.

    Could you please clarify one more thing?

    This script – 813GS2045-GS is now trading at Rs.84. What was it’s true value? Was it Rs. 100? Is true value always Rs. 100/-

    Suppose there is volume and if I purchase this; is it a good buy if I hold it till 2045 because I will be purchasing it at Rs.84 but I will get it with Rs. 100

    • Karthik Rangappa says:

      100 will be the face value. I’m not sure about the true value. Yes, if you manage to buy, and willing to hold, then why not?

  165. Jai Shrestha says:

    Greetings to the team.

    What do you mean by “appreciation in the bond price”?
    Also, an you please explain indexation with reference to the paragraph of “Taxes” ?

    Thank You.

    P.S. – I’m a student & a newbie. Kindly ignore if you find the questions childish.

  166. Prashant says:

    Hi, I purchased 1000 units of 772GS* bond from kite on last Friday. But those units are not credited to my account yet. Can’t see it in my kite.

  167. Priya says:


    Suppose i purchased 70Laks worth of Gsec with coupon rate 7.69%. So total interest amount would be 7.69% of 70Lakhs = 5,38,300/year. I want to know if 5,38,300 rs /year will have TDS deducted during every financial year? or I have to file a tax separately every year ? How much is the maximum cap limit for Interest income will not have TDS deducted during interest payout?

  168. Prashant says:

    It’s thursday and I still don’t see the GS credited to my account.

  169. Prashant says:

    It got credited last night.


  170. sunil says:

    Can you explain how Treasury bills Yield is derived as 6-7.5% ?
    I understand that for every 100 investment for 3 months I get 3 % return and so 12% return. Its straight forward !!

  171. Rohit says:

    As an NRI can i invest through NRE bank account linked to non PIS demat account .
    And what are the tax implications for NRI.

  172. Samir Ranjan Pal says:

    While purchasing g sec on the COIN platform . I understand that all these g sec bonds are always having a coupon payout every half year. Is this correct or that it could also be a ZERO COUPON BOND or Floating rate bond or any other than mentioned.

  173. Feroz says:

    Hi, how can proceed with zerodha coin for investing in G sec?

  174. Feroz says:

    kindly update below query:

    Raghu says:
    December 27, 2019 at 8:25 am
    I have recently invested in G-Sec 617GS2021. With an yield of 6.17%. I was however allotted at a price of 107.15 on a face value of 100. Essentially, I have paid a upfront premium of 7.15% on a yield of 6.17%, which I am going to get later. The time to maturity of the G-Sec is 1.5 years away. Hence I will get payment of 3.08% every 6 months. My return calculation is as below:

    Invested amount: 1,00,000 * 1.0715 = 1,07,150
    Time to maturity: 1.5 years.
    1st payment July 2020 = 3,080.
    2nd payment Jan 2021 = 3,080.
    3rd payment July 2021 = 3,080.
    Total payment received = 9,240.
    Maturity amount at July 2021 = 1,00,000
    Total capital = 1,00,000 + 9,240 = 1,09,240
    Invested capital in Dec 2019 = 1,07,150
    Net earning = 2,090.
    Effective rate of interest is less than 2% per annum.

    My question is: How is this better than Fixed Deposits? I guess I need to trade my G-Sec at a higher rate ASAP. I will lose out big time if I hold this to maturity. Or am I missing something here. I am so disappointed that I fell for the promotion in G-Sec screen in COIN. Please give a correct picture. Please tell investors in G-Sec that it is possible that you will make a loss if your allotted rate is at a premium much higher than the coupon value. I have checked the coupons on recent G-Secs, almost none of them are higher than FD rates (I am comparing ICICI bank rate, which is not the highest in the top banks). You must get the G-Sec at a discount, only then will you beat the FD.

    • Karthik Rangappa says:

      Feroz, Yes, it is better than FD only if you get to buy it at a better rate. I will explicitly mention that in the chapter.

  175. Ritesh Jha says:

    hi Karthik, are you planning to write on fixed income derivatives – credit default swaps, interest rate swaps, interest rate futures, forward rate agreements, etc. Would be interesting to learn these topics. Thanks.

  176. Feroz says:

    Thanks Karthik, but as an investor we dont have any control over the purchase rate of G-sec? am i right?

  177. Sachidananda Pradhan says:

    How are they any better than fds? Although it has higher interest rate…. in gsecs whatever we earn we pay 15% as stcg tax.
    Then isn’t the interest differences taken care off?

    • Karthik Rangappa says:

      Agree, I will change that line. It is better than FD only if it is bought at good rate.

  178. Sachidananda Pradhan says:

    What are these nse emerge and bse sme markets?? Can we see a module on how to invest in them? (Fundamentals, liquidity) etc..
    Also what are your thoughts on those?

  179. Sandhya Rani says:

    Is zerodha planning to onboard RBI bonds(7.75%) or GOI (government of india) bonds?

  180. sunny seth says:

    How interest is paid , for example interest payment is as per interest record date for bonds? Or the interest is calculated as per daily basis such as liquid bees ETF?

  181. sunny seth says:

    Suppose I sell my units before interest payment , would I be eligible to get interest for that period , I was just invested for 3 months will I be eligible to get interest?

  182. shubham says:

    1) Can I buy 7.75% Government (RBI) bond anywhere on earth, example in commercial bank right now? Do I need to wait for RBI notification each time? It has been 2 years since issue.

    2) Can I buy this bond 1 year before maturity. Since the maturity for this bond is 7 years from jan 2018, so if I buy it on jan 2024 is it allowed? what is the criteria? Because other people might be holding it for 7 years while I will be holding it for 1 year still getting same annual returns. Please answer both questions sir.

    • Karthik Rangappa says:

      1) On the secondary market, it is available, just that there should be a seller. The fresh issue depends on the Govt’s borrowing plan
      2) Yes, again depends on the availability

  183. shubham says:

    This article says, 7.75% gov bond is not tradeable in secondary market. Can you tell me where can I trade them?

  184. Raju Paul says:

    Yes it is very safe and sound investment. In my earlier days around 2000 or 2001 I have invested 25000 through PNB Gilt office 12% GOI 2008 at 102/- and hold for 02 years I earn interest of 12% and when sell it price was 110. But I could not continue the same. Right now I don’t know what is the minimum investment and how to follow the G Sec Bonds. If you can guid I will be helpful.

  185. Sharad says:

    How i can buy RBI 7.75% bond.
    Also could you please explain how its interest calculated paid out.

    • Karthik Rangappa says:

      I think the Govt has withdrawn these bonds, Sharad. I’m trying to find more details.

  186. sharath kumar says:

    hi, I have a question on T-bills
    in varsity explained like t bills are issued at the discount price after maturity we will get the full amount,
    after reading this I planned to invest,
    but while placing the order in t bills, for 91 days t bills its showing 3.19% yield.
    so my question is if I place 91 days t bill (units 100 and amount which I invested Rs,10,000 and yield is 3.19%) after 91 days how much yield I will get
    is it 319 rs yield will I get, is it right.
    is there any formula to caliculate yield

    • Karthik Rangappa says:

      The easiest way to think about this is as buying a stock – you buy it at say 97, redeem upon maturity at 100.

  187. rajiv says:

    Hi sir, Thank you. My question: the coupon percentage is always on the face value (=100)? even if i get the T-bill/Bonds at a discount or at premium? or is the coupon percentage always on the amount I invest? Please clarify. Thanks.

    • Karthik Rangappa says:

      T Bills and bonds do not have a coupon, it is a zero-coupon bond. The coupon is on the face value of the bond.

  188. rajiv says:

    Thank you sir for the reply. In your answer you say bonds do not have a coupon and then also say coupon is on the face value of the bond? can you please clarify.

    • Karthik Rangappa says:

      Bonds have a coupon, and coupons are based on the face value. T-Bills don’t have coupons, in fact they are called zero-coupon instruments 🙂

  189. Pradeep J says:

    Hi, Can you please clarify regarding t bills. As mentioned in above comments, like buying at rs97 and selling at rs100. So, if we invest 10000, only 9700 gets debited from our account? After maturity, we will be getting 10000? Is it right?

  190. Prashant says:


    I purchased the “PNB HOUSING FINANCE LIMITED-9.25% ” bond on 27th May 2020 from external source and it has been credited to my dp account which I hold with zerodha. I received such confirmation mail from as well. I checked that even by logging to cdsl account.

    But, when I login to my kite account; it is not listed there. I filed the complaint with on 28th itself but still there is no response.

    Second thing is – some time back I purchased TBill from Coin and it is being shown in my kite page. But the amount that is invested in TBill is not shown in “Total investment” amount on kite. Is this a bug ?

    • Karthik Rangappa says:

      Please check in Console, it should be visible there. Kite will not show if its not listed in the secondary market.
      For the other query, I’d request you to please create a support ticket.

  191. Ravi C says:

    Hi Karthik,

    I am new to the Zerodha platform.

    1. Wanted to check out T-bills/G-secs. Not clear where to find them with many products like Kite, COIN etc. (Console (looks to be only for consolidated viewing)

    2. Wanted to see how to use the platform for buying equity. Same issue as above with too many options and abbreviations in one screen, without being clear on how to instantly trade and conclude the transaction

    3. Deposited a round figure in to my Zerodha account (for starting to transact) and find it is less by some 11-odd rupees now. Nowhere it is stated as to where the 11 odd Rs. was ‘consumed’ ; it has simply vanished, without any intimation to its owner, that’s me. Can’t find details in in Console also.

    Pl. clarify the above queries ; thanks


  192. Ravi C says:


    I’ve raised a support ticket also for the missing minor amount but my idea of asking here is to learn how Zerodha system operates.

    First impression, it’s like a good map but without the ‘You Are Here’ indication part !. So, hoping to fix that, with your help

  193. rajiv says:

    Hello Sir, Thank you.
    My question is on the Buying price of Bond/T-Bills getting decided after we make the Initial payment. Is it possible to back out after getting to know the Buy price? can i decide not to purchase the Bond/T-Bill after seeing the Buy Price (decided by RBI in Auction) ?

    Is it not tough on the investor to invest without knowing the Buy price. Please share your thoughts. Thank you.

    • Karthik Rangappa says:

      The yields will be broadly in line with the current yields of similar maturity securities, you can base the decisions on the indicative yield shown on Coin.

  194. Varun Agrawal says:


    #1: If the interest rate is higher in bonds, why does anybody choose FD?

    #2: Do Zerodha choose its bonds bid price whenever there is an auction? Or it just displays the price from a partner bank? Which bank is it for Zerodha?

    #3: Why bond prices are not fixed in the secondary market? Why do they change so drastically? How do I even know the fair price or if the security is trading at premium/discount? This picture shows a 10% change in 3 months. .

    One last thing. I hope you do a chapter on ETF someday.

    • Karthik Rangappa says:

      1) FD is considered risk free, bonds are subjected to both credit and interest rate risk
      2) No, we cannot participate in the auction, only the participating members from RBI can
      3) Bonds can be easily priced, unlike stocks. The fluctuation is only because of the lack of liquidity
      4) ETFs will be a part of the ongoing module on personal finance.

  195. Chandradeep Kumar says:

    Sir, in the start of this module you have said that we will also discuss Interest Rate Futures but in the mid you have cancelled that part due to low liquidity in this security. But if you can please put out a chapter on this topic it will help us a lot.
    Also I can understand you must be very busy and might not get the time to write such a chapter, can you please suggest source or articles where we can get knowledge on this topic in the easy language like varsity.

    • Karthik Rangappa says:

      I think the contract itself has been withdrawn by the exchange. There was/is hardly any liquidity in IRF.

  196. Varun Agrawal says:

    One of these bonds have changed 150%. Can it be possible by liquidity alone?

    • Karthik Rangappa says:

      Can be both liquidity or the lack of it. But yeah, this is quite a drastic move for a t-bill.

  197. Sundar says:

    Are gsec tax exempt under section 80ccf? How to find gsec or bonds tax exempt under 80ccf?

  198. vimal says:

    Hi, I have few questions on T BILLS
    Say if I purchase a 91 day tbill and I invested 10,000. After RBI auction process it’s decided that the discounted price is 98/-. So zerodha will debit 9,800 only? And RBI will pay 10,000 after maturity?

  199. Kanji says:

    Overall T bills gives a return of approximately 12% per annum, while bonds give a return of 7% OR 6% depending upon the bond. Which is still less then returns provided by T bills.

    So why will a person invest in bonds at low return?

  200. Rishab Saxena says:

    Hi Karthik/ Varsity team,

    Have few doubts.
    1. Can T-bills give negative returns? Means can buy value>face value
    2. Can T-bills trade in secondary market or close prematurely?
    3. If ans of 1st point is ‘No’, then why mostly people park money in FD but in t-bills?

    Thanks in advance

  201. Anand says:


    Where to check the upcoming T-Bills? The link mentioned on the article is connected to a page from 2018.

  202. Rishab Saxena says:

    Hi Karthik,

    Suppose, I bought T-bill and current value came as 99.2258, Is maximum face value can be 100 or how final face value can be determined?
    If i want to close the T-bill pre-maturely, how can i do in zerodha/coin platform?


    • Karthik Rangappa says:

      Yes, the maximum face value is 100. You will have to try to sell it on the secondary market.

  203. Pradeep says:

    So well explained. Congratulations.

  204. Ajay says:

    whether RBI flexible bonds can be purchased from Zerodha

  205. Ajay says:

    Any plan to add RBI flexible bond in near future

  206. Prakasan says:

    Dear Sir,

    What is face value of 1 unit in Government security bond. Will it be always 100 rupees ?


  207. Padhy says:

    Hello, Can I pledge the G-sec bonds for getting margin ? I saw some responses above saying “we are working”. So would be good if you have any good news around that.


  208. Prajakta says:

    I have bought SGB via Coin, zerodha. where can i see them in my demat account?

  209. Nihal Melwani says:

    Hi Mr.Karthik,

    Had a question on bonds, if I hold a bond for 3years and I had originally purchased it at a premium say 105 and then upon maturity (which is at a time 3 years above the original purchase date) I will get back only 100 as that is the face value of the bond and therefore I would have a net capital loss of 5, right? Can I harvest this capital loss against other capital gains that I may have incurred in that same financial year?


  210. Nihal Melwani says:

    Also Mr.K, how does one purchase bonds that are listed on the NSE / BSE website ?
    If I can either participate in the private placement?
    Or how do I buy them through my demat ac in the secondary market? Specifically how do I search for them, what is their nomenclature used that make them identifiable on the kite portal?
    Lastly what do you mean by put and call options on bonds??


  211. Sunny says:

    Can you plz tell me the interest record date for 716goi2050 bond and also plz mention how to get the interest record date for government securities such as goi bonds and sovereign gold bond

  212. Sunny says:

    Thank you for your quick reply but It doesn’t contain any info related to interest record date, plz provide a link or notification to check the interest record date

  213. Sunny says:

    I am looking to check the interest record date for various gsec bonds such as 716gs2050, I have searched whole rbi site but didn’t get the interest record date

  214. GOPALSAMY says:

    Can I pledge the g security as a collateral?

  215. Anjali Agarwal says:

    Do not invest in T-Bill, i have invested in them and still the principal amount is not received to me even after 1.5 months.
    And no one is giving any resolution everyone is putting it on another person.
    I would highly recommend don’t fall for it. Because you’ll not get the return of even 5% as they say.
    And big thing is you’ll lose your money as I haven’t got the amount till date.

  216. Prakasan says:

    Sir, Namaskar

    The coupons in Government securities are based on face value of the bond. How we can come to know the face value of ONE bond after allotting the security bond on application ?.

  217. Prakasan says:

    Sir, If I have been allotted 2000 units of Government security bond in June 2020, how much would be my coupon in Sept, 2020 ?. How it is calculated ?

    • Karthik Rangappa says:

      It is the coupon rate times the face value. For example 6.5% on the face value of 1000 will give you a coupon of Rs.65 per year.

  218. Prakasan says:


    I knew that it is the coupon rate times the face value. I purchased 7.19GS2060. But how I can come to know the face value of one unit ?.

    Is the face value of one unit always rupees 100 ?.

  219. Vaishakh says:

    1) Can you mention some Tax saving or Tax free bonds (if they exist)
    2) As a thumb rule, can we declare that long term govt bonds (10-15 yrs or more for maturity) have more interest rates than short term bonds (say 3-5 yrs of maturity from date of initiation)

  220. Vaishakh says:

    Ok, so if short term Interest rates are higher than long term rates, then cost of borrowing is more on short term basis than the long term. Isn’t it difficult for corporates/individuals to pay high rates on relatively small time period. Actually, I am refering to ‘Yield Curve’

    • Karthik Rangappa says:

      Yes, working capital may be tight, but long term CAPEX will be at a cheaper cost. Its always a trade-off.

  221. VPai says:

    What happens on death of the GSec bond buyer , in case of single applicant of demat account with a nominee. Will the bonds be encashed and credited to the bank account of nominee on death of demat account holder . PL clarify

  222. Aakash says:

    Hi Karthik,

    Great article! I’m looking at the current list of upcoming bonds here, but don’t see any names as mentioned by you. Could you let me know how can I find out the details of each of these bonds?


  223. Ashwini says:

    1. Can the principal amount we bought the G-Sec bond for decrease, For ex: I paid Rs.100 for the bond, can it go down to Rs.97 just like stocks?
    2. what happens if I don’t sell my bond till maturity. Will I get the initial principal amount I paid?

    • Karthik Rangappa says:

      1) Yes, this is possible. But if you hold to maturity, then you will redeem the FV.
      2) Yes, you will.

  224. Krishnan PS says:

    @Karthik I would like to invest in 91 Day T-Bill through Zerodha. The bid close date for the upcoming bill is 20-10-2020 6:00 PM. As per the link in the T-Bill with a yield of 3.27% is valued at Rs 100. I have the following queries

    1. Is the 91 Day T-Bill tradeable, Can I sell it anytime in before 91-days
    2. If I would like to sell before 91 days, how and in which platform can I sell, and how is the sale rate / selling determined, Is there a platform where i can view the current price
    3. If I hold the 91 Day T-Bill till maturity, on an investment of Rs 10000, is my return Rs 100 / Unit x 3.27% x 91days/365days, or is the 91 Day T-Bill discounted and I buy the 91 Day T-Bill at Rs 100/Unit – Rs 100 / Unit x 3.27% x 91days/365days. If I am buying at discounted rate, why is the Zerodha Coin link displaying it the face value as Rs 100


    • Karthik Rangappa says:

      1) Yes, you can
      2) You can on Kite or do write to us
      3) YOu buy it a discounted value and upon maturity, you realise the full premium i.e. Rs.100. The link is showing you the face value.

  225. VINAY says:

    can g sec can be pledeged now after new pledging system??

  226. Vaishakh says:

    Since Govt bonds and T-Bills are traded on exchanges. Which Brokers facilitate buying/selling of these bonds ? Besides, equity and commodities Does zerodha provide service for bonds ?

    • Karthik Rangappa says:

      In the sense that you can transact in the secondary market, load the security in your Marketwatch, just like the stocks.

  227. Ashish Gupta says:

    Hi Karthik,

    Let’s say, I buy Bond 820NHAI22 at 1057. So by the calculation I’m supposed to receive 8.20% annually but on what price? Will this be at 1057 which I paid? or any other value? If this something else then where to check this before buying?

    Ashish Gupta

  228. Anil Bhadage says:

    How to invest in RBI bonds 7.15%
    What are the charges by Zerodha?

  229. Sankar says:

    Most of us read something called G-sec, bonds, T-bill in daily papers. I did not show any intrest due to the assumption of G-Sec is for banks and RBI. This chapter has driven me to spare my investments to G-Sec also. We are also bored with mutual fund and Equities in all magazines. Thank you for wriitng on a new topic. Hope that you will explore new topics like these.

  230. Sanjeev Bhagwat says:

    why bid price is fixed for Gsec in the coin portal

    • Karthik Rangappa says:

      They are indicative price, if there is any difference in price after the final auction, then the difference amount will be credited back to you.

  231. Pranav Deshpande says:

    Hi Karthik,
    What is the difference between Government Securities (GSecs) and public sector bonds? Are they one and the same? For example, I read that the Bharat Bond is a debt ETF and it’s underlying securities consist of bonds floated by various PSU companies.

    Could you please explain the difference?

    • Karthik Rangappa says:

      Govt bonds are directly guaranteed by the Govt, the public sector has an implicit guarantee. Think of it as a very honest person taking a loan and a relative of this honest person taking a loan.

  232. Pranav Deshpande says:

    Thanks. Also, is there a difference between RBI bonds and GSecs? Where does the RBI sovereign gold bond fall into all this?

    • Karthik Rangappa says:

      Yes, RBI bonds are issued by RBI, while GSec from the Government. They both are similar in terms of credit risk.

  233. Sunil says:

    0.06% or Rs 6 for every Rs 10,000 invested will be charged as brokerage. is it one time charge? or will be charged every Month/Year.
    Please confirm.

  234. trader says:

    I have G-Sec having ISIN IN0020190099, which I had purchased in 2019. I only have interested credit for this once. No interest received thereafter.
    I checked this link does it mean interest it outstanding with GOI?

    • Karthik Rangappa says:

      Please check the frequency of interest payment along with the dates. GOI does not keep this as an outstanding and it is a default 🙂

  235. Sidharth says:

    Could you update the rbi bonds/tbills links to year 2021 ? They show 2018. Also the link to ncds on economic times requires an et prime membership. Anyway to avoid that,

    Enlightenment (by varsity) reader

  236. P SRINIVAS says:


  237. Dheeraj Agrawal says:

    Sir, can you please tell what is the tax liability applied on government securities.

  238. Vijayan says:

    Sir, If we bought GSec in secondary matket, then shall we entitled for interest payment semi annually?

  239. Shailendra kumrawat says:

    I want to buy govt security from secondary market. How to know the par value of that security. And how to know whether the security trading at discount or premier

    • Karthik Rangappa says:

      Shailendra, you look up the Face value and the offered price, you will know if it is trading at par or discount.

  240. Tango says:

    Hi sir,
    1) I cant found G-secs investment options in zerodha coin app.How can i invest through zerodha coin in G-secs? or there is another platform to invest in it?
    2)most of bonds (recent issue and old) i searched ,there is zero liquidity.Its not ok when i want premature exit. Plz comment on this.

  241. Prashant says:

    Very good article


    I have invested in following SDL 684MH32-SG.
    It shows me in my holdings .This SDL , it will mature on 2032. Can i exit before maturity and how? Also in Holding it does not show last traded price, is this available for trade and or if i want to exit how can i exit?


    I tryed to sell but still not listed

  244. Pavan says:

    What date does the G-sec end? For example, if the G-sec name is 575GS2023, we know it matures in 2023 but which day? 31st December?

    • Karthik Rangappa says:

      If you look up for the bond details, you’ll get to know the exact maturity date. Google using the G Sec name, that will lead you to the bond page.

  245. Akash says:

    I invested in UP SDL 2030 last year [14 December 2020] with a maturity of 10 years. As per the article, I am supposed to get an interest every 6 months but I am yet to receive any interest.
    Are there different cycles for different schemes? Is there a place where I find more about a particular SDL [here UP SDL 2030]?


    • Karthik Rangappa says:

      Aksah, I’d suggest you create a ticket for this. I’m not sure about the cycles for SDLs.

  246. Sree Arvind Harish says:

    Hey as someone very new to any form of investing, I have a few basic doubts
    1. What should be my minimum balance in trading account to make the least NC bid for 91 day T-bill (is it 10,000 or more?)
    2. On maturity the amount deposited in my trading account would be (amount invested + profit (100-9x)) correct ?
    3. The minimum bid is 10000 for retail investors. So for example, if 99 is the discounted rate, the minimum tranche should be 10098. And say the amount in trading account was 10050, Issue would be refused correct? and final return would be 10200. Is this understanding correct ?
    Sorry about series of questions, kindly explain if possible.

  247. Samay says:

    Hello Sir,

    I hope you are doing well.

    1) Are all T bills issued under par?
    2) Now lets say I purchase a bond with a 8% rate and maturity date of 2030
    a) Are the interest payments done like a dividend?
    b) What if decide to purchase before the half-yearly /yearlyinterest payment. Will I get payment?

  248. Goutam says:

    1) The current return from treasury bills is around 3%. The return from GOI bonds are also around 6%. What is the expected return from SDLs?

    2) How do I know the interest rate of SDLs? In the GoBid platform I find that those will be available @105/-. But the interest rate is not given. So how do I calculate the return?

    • Karthik Rangappa says:

      1) SLDs carry higher risk, so expected returns are higher from SDL
      2) Have you checked the SDL page for these details?

  249. chirag says:

    Can we sell g-sec before maturity or hold it until tell end?
    What is the difference between indicative yield and sec name like 6.67gs2030 but indicative yield shown is 7.1%?

    • Karthik Rangappa says:

      You can sell before maturity. Yield changes with the change in price, indicative yield is the yield you’d expect given the current price of the bond.

  250. Sanjiv says:

    if I buy SGBs in secondary market and hold them till maturity, will the Capital gains be taxed?

    • Karthik Rangappa says:

      I don’t think it would make any difference in terms of taxation. Its better you check with your CA once.

  251. Keshav says:

    Can I invest and pledge the upcoming g securities? Because In secondary market g securities are not liquid..

    • Karthik Rangappa says:

      I’m not sure if it’s accepted in the pledge list, I’d suggest you speak to the customer desk once.

  252. Laxmesh says:

    Whats the process of investing in these bonds through Zerodha app

  253. Rakesh says:

    Dear Sir,

    I am having government security of 7.19%GS2050. Is the interest return from it taxable ?

  254. Aniruddha Tambe says:

    It was of great help

  255. Nirmla says:

    I invested XX lacs in T bill for 3 month and received XX which become roughly 0.81% for 3 month and annually 3.24% and Zerodha charged me 0.07% out of 0.81% and ultimately i received 0.74% (2.96% annually) this is all bulshit !!! Here only zerodha makes money as we could earn more than this in FD at least 5%

  256. Akshay says:

    Hi sir, lets say i invest in 923GS2043 at 114.9 (LTP), and lets say at maturity LTP gets below the face value of bond (assuming 94), how will affect my overall returns??

    • Karthik Rangappa says:

      At maturity, you will anyway get the face value of the bond, so LTV dropping it does not matter much.

  257. Ankit Kumar Maurya says:

    If I will buy bond from stock market,I will receive semi annual interest or not ?

  258. Paras Gupta says:

    How to decide whoch Bond is suitable for my investment goals, between capital indexed, inflation indexed, savings bond etc. Where to find detailed read on Varsity for these different types of Gsec bonds

  259. Revanth says:

    Will the balance amount after purchasing of T-Bills be credited to my trading account or bank account? After the bid closes on Tuesday, when can I expect for the T-Bills to get credited to my DEMAT account?

  260. Surya says:

    How to check already purchased 91 day t bill from coin zerodha? It is reflecting in cdsl but where to find in zerodha?

  261. Aarti says:

    Hello sir, hope you are doing good!

    Sir can you explain why would a bond trade at a premium when coupon rate exceeds YTM and vice versa?

    Many thanks!

    • Karthik Rangappa says:

      This happens when the demand increases for the bond, which in turn happens for two reasons –

      1) Uncertainty in the equity market, leading to bond-buying
      2) When the interest rate on the bond is more attractive compared to other bonds.

      Btw, increase in bond rates decreases the YTM of the bons.

  262. Aarti says:

    Doubt 2:

    When the bond is sold before its maturity, why is the capital gain/loss calculated as the difference between amount sold for v/s carrying value, instead of amount sold for v/s cost of acquisition?

    Thanks again!

  263. Prashanth says:

    Sir if I buy long term govt bond and need to liquidate the bond in between, will I get the same amount which I have invested in the bond. Or it can go low

    • Karthik Rangappa says:

      No, bond prices fluctuate. So you will get the prevailing market price at the time you decide to sell.

  264. Avadhoot says:

    I have purchased 1 lot of SDL. Can it be pledged as collateral for margin (for options trading)?

  265. Sanal MG says:

    How the T-bonds and G securities behave during the following situations: war, stock market crash as in 2008, high inflation (say, over 10%)?

  266. Sanjay says:


    I have bought State Development Loans orders (737AP38-SG) from Coin and it reflects in my holdings also but Avg. cost is not there. It further shows a warning that “There may be a discrepancy with this stock”. It gives an option to manually add the trade but when I tried that, system couldn’t recognise it.

  267. Shivansh Agarwal says:

    for treasury bills above you have mentioned that a typical 91day Tbill yield is 6-7% how’s that calculated, cause as in the above eg. for Tbill if the annual yield is 12% then on pro rata basis for 91 days it should be around 3-4%.

    • Karthik Rangappa says:

      Treasury rates are set by RBI, yield is a function of market demand and supply of the t bills.

  268. Shivansh Agarwal says:

    what type of risks does government securities have

  269. Shivansh Agarwal says:

    and don’t they carry interest rate risk (the long term bonds)

  270. Shivansh Agarwal says:

    what do you mean by “not really specific”

  271. Shivansh Agarwal says:

    yes I was asking specifically for the govt bonds only (don’t long term Govt. bonds carry interest rate risk)

  272. Muthu Suriya says:

    Sir in coin website i could see around 3% interest against 91 day T-Bill
    my doubt is that 3% an annualised figure?

  273. Muthu Suriya says:

    Sir if i buy Govt bonds directly from secondary markets
    1) can i give it as collateral for option selling?
    2) and am i entitled to receive interest on these bonds?

  274. Chetan says:

    Hello sir,
    I’m once again appreciating you on a wonderful chapter .
    On ending note i just have one question .. as of today (21st may 2022) how do we invest in GSecs via zerodha …

  275. Chetan says:

    Sir on another note … Can we trade cross currency pairs via Kite ?? Because they did not show up on the margin calculator for currencies… It showed only the ones that contained INR on one side

  276. Chetan says:

    Sir similar to the question I asked earlier but slight different question
    1. So cross currency pairs are listed in NSE then why isn’t they allowed at Zerodha??
    2. The apps that allow trading FX are they even legal ?? Or SEBI registered??
    3. Is it legal for a Indian to open a trading account with a international broker and directly trade in FX market or even securities in S&P , or CBOE??

  277. Shivansh Agarwal says:

    hey I recently looked into new issues of government bonds and found something strange can you please explain me about it:-

    a) Central govt. bond maturity date 15th Dec 2051 fixed coupon rate of 6.99 p.a.
    b) Central govt. bond maturity date 23rd May 2036 fixed coupon rate of 7.54 p.a.

    what’s this, that longer maturity bond has lower interest rate and short maturity bond has a higher interest rate

    • Karthik Rangappa says:

      Look at this way – the longer maturity bond gives you an opportunity to lock in a known interest rate for a longer time. Hence these rates also tend to be lower compared to shorter tern bonds, where the uncertainty is higher.

  278. Shivansh Agarwal says:

    what kind of uncertainty are you talking about

  279. Shivansh Agarwal says:

    what kind uncertainty you mean is there in longer duration bonds

  280. Pankaj says:

    Pls. share link of all outstanding SDL’s. I want to buy some in secondary market

  281. Chetan Nahata says:

    Sir loving your work ever since no place for doubts matter is given with superb clarity 🙂
    something to always look forward to 🙂

    However you see I have a coupe of fundamental doubts
    1. Are Gsecs and RBI issued Gold bonds freely tradeable in the secondary markets?
    2. Can we trade forex round the clock with zerodha?
    3. Can we tarde in MCX no agri commodities full time as per exchange (timing being 9 am to 11 30pm) with zerodha?

    • Karthik Rangappa says:

      1) Some are, Chetan. But from whatever I know the liquidity is not great.
      2) No, that is not can trade only during the market timings.
      3) Yes, you can trade as long as the market is open.

  282. Chetan Nahata says:

    Thanks for being so kind Karthik Ji Wish you and your family a happpy and long life ahead:)

  283. Ambar says:

    HI, I was checking the 91 day T-bills and I see that the minimum is 100 units priced at 100INR. So the price comes at 10000INR for 100 units. As fas as I understand, on maturity I will get 100per unit and hence 10000INR. So what is my profit? Could you please clarify if I am missing something?

    • Karthik Rangappa says:

      Ambar, when you buy, you will buy it at a discount and after 91 days, the value will be 100, the difference is your profit.

  284. Ambar says:

    Also, what are the charges(GST and Service charges etc.) if any from govt.’s side and zerodha’s side? So if I buy 100units @ 10000 and the yield is 5% p.a., how much will I get after all the deductions(after brokerage, TDS etc. whichever are applicable)?

    • Karthik Rangappa says:

      O.06% or Rs 6 for every Rs 10,000 invested will be charged as brokerage. 18% GST will be applicable on the total brokerage incurred.

  285. Chetan Nahata says:

    Hello Sir This is Chetan, with another query
    So exactly today I saw that in coin there was GOI dated bond 6.95%GS2061 so as the name suggests it should have a yield of 6.95%
    But Coin also showed something as Interactive Yield of 7.67%
    What is interactive yield and how’s it different from the other one
    Could you please take a moment and explain it in pretty brief 🙂

    • Karthik Rangappa says:

      Indicative yield is the likely yield you will get basis the auction, but its not accurate. Will change slightly 🙂

  286. Sakina says:

    I placed an order for goi bond 1000 unit on coin. It showed price is Rs 105250. It should be 100,000 only why i have to pay a premium of 5250

  287. Pavan says:

    Sir, can u explain the right time to buy the bonds as it depends on some factors like inflation and interest rates.
    So would please explain this and when is the right time to buy bonds?

    • Karthik Rangappa says:

      It depends, on what do you base your decision to buy? If you intend to hold to maturity, then you can buy anytime, wont make any difference. But if you are trading bonds, then that is a different thing all together.

  288. Linson says:

    Please explain the terms dirty price and clean price associated with the Gsecs. Please also advise the for filing the income tax returns for income from gsecs and Tbills. I use ITR2.

    • Karthik Rangappa says:

      Hey Linson, I’ve explained the terms in the chapter itself. About IT returns, please do check with your CA.

  289. Vineet says:

    If I want to withdraw my T-bill before the maturity rate, will there be penalty of any sort?

  290. Vinayak says:


    Does 91 days T bill gives me around 6 – 7.5 percent profit ?
    On the other hand 6 months or 1 year T bill will also give me 6 – 7.5 percent profit..
    So everyone will try for 91 days T bills , why some one will go for longer period if they are getting same prodfit in shorter time

    I am Missing something ,please clarify..

    Thanks in advance

    • Karthik Rangappa says:

      What other options would you have to invest for 1 year? In case you want to park funds for a 1 year?

  291. Vinayak says:

    Hi Karthick

    I have read few comments here , Does 91 T bill profit is calculated on yearly basis

    So let’s take a example
    Let’s assume interest rate is 6 percent in current case
    I have invested 100 rs in 91 days T bill . And after 91 days I will be getting 3 months / 12 months profit

    So after 91 days I will be getting (6 rs / 365 days)* 91 days ??
    So I will get 2.49 Rs after 91 days ?

    Am I right Karthick??

  292. Sachin Singh says:

    Hello Karthik, yesterday I had purchased units of 6.69% GS 2024 through Coin. If I’m not wrong, these were part of a re-issue:

    a) One of the coupon dates is June 27th, and the maturity date in 2024 is also June 27th. So on June 27th 2024, I’ll get the coupon payment & the principal amount both deposited in my bank account? Is there some purpose for keeping the dates same?
    b) Since these already exist in the market (IN0020220052), the ISIN for this re-issue will also be the same?
    c) What exactly is the significance of a re-issue? Why does the govt. go this route? Is it because they couldn’t fill the original quota?

    Bit of a longish post but would appreciate an answer. Thanks.

    • Kulsum Khan says:

      1. Don’t think there’s any reason, just one of those things I guess.
      2. Yep. The same securities are recycled.
      3. RBI keeps buying and selling Govt bonds. For example, when RBI does an Open Market Operation (OMO), it buys bonds from the market and sits on them. When it has to issue bonds at a later date to raise money, it can just sell the existing bonds instead of issuing new bonds.

  293. Chandra says:

    Excellent article. I would like to know if RBI’s Floating rate bonds (seven year term period, currently offering 7.15% returns) are also available for investment in Zerodha Coin’s Gsec orders page. I am able to see Gsecs, T-bills and SDL but no Floating rate bonds.

  294. murugesan says:

    Dear sir, from secondary market GOI bonds minimum purchase is 10 quantities still i will be getting interest for this amount (10*100) suppose i dont want to sell it after maturity it will be deposited to account.

  295. Murugesan K says:

    Sir, my question was for 10 quantities will I get interest, and after maturity will I get my amount back

  296. Murugesan K says:

    Sir, my question was for 10 quantities will I get interest, and after maturity will I get my amount back .

  297. srikanth says:

    Hello sir

    i am unable to pledge T bills for collateral margin in holdings section.Is it possible or not sir.

  298. SAKINA says:

    Hi Karthik

    I bought RBI Bond and pledged for margin. I understand that i will get my interest semiannually. but what will happen if I forget to unpledge these bonds at the time of maturity. will system automatically unpledge these bonds and I will get my principal amount back in my account?? or I have to unpledge it manually than only I will get my principal amount.

  299. SAKINA says:

    Hi Karthik

    I bought RBI Bond and pledged for margin. I understand that i will get my interest semiannually. but what will happen if I forget to unpledge these bonds at the time of maturity. will system automatically unpledge these bonds and I will get my principal amount back in my account?? or I have to unpledge it manually than only I will get my principal amount.

    • Karthik Rangappa says:

      I’m sorry, I think you posted this comment earlier also (was it you or someone else, I forget) and I forgot to reply.

      Anyway, so this can’t happen, when your securities are due for maturity, the broker will send a message saying this particular bond is due for maturity and hence you will have to unpledged and pledge something else for margins. Upon unpledging, you will get the monies due to you.

  300. Sakina says:

    Thanks Karthik, Could you please help me by telling any security/investment on which i can claim 80C rebate and same can be pledged for margin as well

    • Karthik Rangappa says:

      ELSS funds offer 80c but cant be pledged. Govt securities can be pledged, but no 80c. Can’t think of an instrument that offers both 🙂

  301. Pratik Jain says:


    how to decode information for T bills like 182D011222.

  302. Megha Runthala says:

    Sir, I have read that bond price is the present value of the future cash flow of the bond.. can you please tell me what this actually implies?
    and why do we need to find out the present value? Is this something related to trading them in the secondary market?

    thank you so much!

    • Karthik Rangappa says:

      Bond’s value is dependent on the future cash flow. Hence taking the present value of future cash flow helps you determine the bond price.

  303. Megha Runthala says:

    and also sir, please could you simplify this DISCOUNTED RATE which is used for the valuation of bonds?

  304. Megha Runthala says:

    like what is the discounted rate ?
    why we need it?
    and how it is calculated?

  305. Challa.GK says:

    How can one knows which bond got interest among 3 or 4 bonds in demat account

  306. Aashrith Govindraj says:

    In the section ‘Can you give me an illustration to help me understand how much I earn if I were to invest in a bond?’, you have table and you have a comment ‘Additional 240 Rs’. What does this mean?

    Is it possible for the weighted average price of a G-Sec to be more than the amount payable?

  307. Sahil says:

    Hello sir/medam,
    i want to invest in t bills how can I invest in t bills. And sir if any sites are working for them then which site going and which places means which one option select And also what is the difference between t bills vs mutual funds vs government sgbond.
    And sir if I want to buy t bills which period i select to hold that given best profitable return ?.
    Please kindly inform me.

  308. Sumedh M says:

    I want to place order for G-sec bonds, i am new to zerodha platform, where i need to add money for this or whether it is as per ABSA method used for IPO.

  309. Sameer says:

    Can we download the t-bill reciept. Like if we have invested in a t-bill do we get a reciept like we get it while we do FD.

  310. Shivansh Agarwal says:

    general question; how t-bills can be sold other than the exchange as their is almost no liquidity for them when they get listed

  311. Shivansh Agarwal says:

    so there isn’t any other option to sell them ??

  312. Avinash Rao G K says:

    If I pledge these Government securities and If I forgot to un pledge these government bonds while maturity. what will happen ?

  313. Allwyn Nadar says:


    Greetings for the day.

    Im a new investor for Tbill, today i have bided for Tbill, and i want to know how to check the allotment status so can someone help me to check.

  314. sumit says:

    Can we pledge T bills at zerodha to get margin money.Will zerodha treat it as cash component as margin

  315. Puneet says:

    I heard that the liquidity for T-bills in secondary market is not high if one wants to sell the tbills before the maturity date. How true is this, can you tell?

  316. Samantha says:

    Taxation of T-Bills for INDIVIDUALS.
    1.T-Bills are Promissory notes. They Don’t pay interest. They are issued AT A Discount.
    2.Since by definition these are not SCRIPS ,so No Question of STCG.
    3.Since they don’t pay interest, It’s not INTEREST INCOME.
    4.THERE IS NO INCOME TAX ON DISCOUNT. If someone contests please show section.
    Income tax department and CA’s are interested parties who somehow want to earn money, have distorted the tax treatment of T-BILLS.

  317. Samantha says:

    Taxation of T-Bills for INDIVIDUALS.
    1.T-Bills are Promissory notes. They Don’t pay interest. They are issued AT A Discount.
    2.Since by definition these are not SCRIPS ,so No Question of STCG.
    3.Since they don’t pay interest, It’s not INTEREST INCOME.
    4.THERE IS NO INCOME TAX ON DISCOUNT. If someone contests please show section.
    Income tax department and CA’s are interested parties who somehow want to earn money, have distorted the tax treatment of T-BILLS.

  318. piyush mishra says:

    Hi sir is there any broker limit decided for government securities like in case of liquid funds it is decided..

  319. Sanjay Mehta says:

    Can a partnership Firm invest in T-Bills, if yes, then what KYC will the RBI expect, since, one cannot expect an AADHAR card of a Partnership firm,
    Kindly advice if possible.
    Thanks 👍 in advance 💯😎

  320. Gaurav Bhandari says:

    Hi Karthik,

    This is the first time I invested in a t-bill from Zerodha. 364D161123-TB. I can see that it is now listed and is trading at a discount to the price at which I was allotted( it is now trading at 93 vs my allotment price of 93.58).
    My queries are –
    1. If I buy more(for ex – 1000) from secondary market now what will happen at the expiry? Will RBI transfer 1000*100 = 100000 in my account when the t-bills expire in addition to the quantities I already hold?
    2. I’m assuming my returns will increase when t-bills expire as I’m averaging down but selling would be fixed at rs. 100/-. Is this assumption correct?
    3. At the time of expiry, is there any liquidity issue? I want to know whether any action would be required from my side or it’ll all happen automatically?

  321. Mani says:

    Sir, I have a doubt regarding buying a bond in secondary market. Today I checked the prices of bonds in kite. Bond 669GS2024 is trading at 103.05 but 618GS2024 is trading at 99.08. I understand that 103.05 includes a accrued interest(dirty price) but why is 618GS2024 is trading at 99.08, it looks very cheap, am I missing something here.

    Can I calculate the dirty price of bond based on number days from current date till expiry?

  322. Bhav says:

    When we sell GOI Bond – GS – before completing 6 months (i.e. before my first Interest Date), do I get the interest on the days which I held it?

  323. Bharat says:

    Pls share any monthly income government bonds

  324. Vinayaka Prabhu says:

    Hello Sir,
    This issue is expiring in 2024, i.e. 4 years from now (we are in 2020). If you were to invest in this bond, you would receive 5.7% interest semi-annually until maturity, which is 2024.

    5.7 is annual interest. Not semi. a small typo mistake is there.


  325. saradakanth says:

    I am not clear with the way Risk assessment section is written. It says:
    “What about the Risk Assessment?
    Unlike most G-Secs that have Implicit Sovereign Guarantee ( High Risk or significant funding cost advantages for the institutions that benefit from them), SDLs are associated under Explicit Sovereign Guarantee, which basically means, according to CRAR prudential norm released by RBI the risk accompanied with SDLs is weighted as zero. Banks are not required to keep any capital for investing in SDLs. Hence, making it the risk-free instrument to invest in than most of the other Central Government Securities. ”

    My Questions:
    1. You wrote G-secs have implicit soverign guarantee, SDLs have explicit soverign guarantee..
    Am not clear if Implicit guarantee is better or Explicit guarantee? Which one is 100% risk free, pls clarify?
    2. If G-sec are risk free then beside the term implicit soverign guarantee you also wrote “(High risk …)” , which is confusing.
    3. I was under the impression that Central government can never default (unless there is some nuclear war or very bad governance etc) but state governments based on mismanagement of funds /local governance might default .. am I wrong?
    so am confused with the statement “Banks are not required to keep any capital for investing in SDLs. Hence, making it the risk-free instrument to invest in than most of the other Central Government Securities. “”. Pls clarify.
    4. Which ones should I use for Retirement purpose : Gsec or SDL?

    • Karthik Rangappa says:

      1) SDLs dont. Only G Secs have. G Secs is deemed risk-free as we expect India not to default on its debt obligations. But individual states can, although they try their level best not to default.
      2) You need to see the context in which I have used high risk. Default risk is minimum for G sec, but not credit rate risk
      3) Nope, you got that right. Also, its not like ‘never’, default, the Govts try their best not to.
      4) I’d suggest GSec, but do check with an advisor once.

  326. Hyma says:

    If i place an order for T-bills through zerodha and its get allocated on my demat account and later if i want to sell that T Bill, Is it possible through zerodha

  327. Raman says:

    I know it will be accepted as collateral but Will it be accepted under cash component of collateral or non cash component.

  328. Vaishnavi says:

    1. If the yearly yield is for 6.93%then why the bond is
    for 91 days
    2.And if we reinvest after 91 days in the same year
    then will we get 6.93% on the invested amount
    3. Does it means foreg. 100par value will get discount of 98 means a profit of 2rs then if aperson invest 10,000then if he gets it 9800 then he have profit of 200 and then interest of 6.93 %on par value means 600-700 then total around 1000 on 10000

    • Karthik Rangappa says:

      1) Yearly its 6.93%, so for 91 days it will be proportional.
      2) Yes, provided the next Gsec also offers the same yield
      3) Yes, that’s right.

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