Government Bonds in India | Types, Advantages, and How to Invest (2024)

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Government Bonds in India | Types, Advantages, and How to Invest (20)

Government Bonds in India | Types, Advantages, and How to Invest (21)

Average returns7.26%

Average Yield7.14%

Min. Investment₹100

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What are Government Bonds?

Government bond in India is essentially a contract between the issuer and the investor, in which the Government (issuer) guarantees repayment of principal along with interest-earning at the maturity date.

Government bonds, known for their stable nature and guaranteed by the issuing government, are considered low-risk investments. With fixed interest rates, they serve as a funding tool for governments to support initiatives like infrastructure development, social programs, and various expenses.

Best Government Bonds for your investment

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ANDHRA PRA...
INE01E708016

Price
₹ 200,000

Coupon
10.32%

Rating
A-

Yield
14.75%

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TAMIL NADU...
INE340M08160

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₹ 1,000,000

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9.7%

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WEST BENGA...
INE411L07015

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₹ 1,000,000

Coupon
9.34%

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Yield
13.77%

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WEST BENGA...
INE411L07031

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₹ 1,000,000

Coupon
10.85%

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Yield
12.58%

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ANDHRA PRA...
INE01E708032

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₹ 200,000

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10.32%

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Yield
10.71%

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ANDHRA PRA...
INE01E708040

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₹ 200,000

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10.32%

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Yield
10.52%

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CHHATTISGA...
INE512S08021

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₹ 1,000,000

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10.36%

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Yield
10.51%

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KERALA FIN...
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8.99%

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Yield
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RAJASTHAN ...
INE572F09202

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₹ 1,000,000

Coupon
8.65%

Rating
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Yield
10.45%

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WEST BENGA...
INE411L07023

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₹ 1,000,000

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Yield
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ANDHRA PRA...
INE01E708057

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Yield
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RAJASTHAN ...
INE572F11257

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₹ 500,000

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10.15%

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KARNATAKA ...
INE549F08509

Price
₹ 1,000,000

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9.24%

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AA-

Yield
10%

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UP POWER C...
INE540P07236

Price
₹ 1,000,000

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9.75%

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Yield
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RAJASTHAN ...
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Yield
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Best Government Bonds for your investment

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AllGovernment Bonds in India | Types, Advantages, and How to Invest (37)

Coupon(%)
All Government Bonds in India | Types, Advantages, and How to Invest (38)

Yield(%):
All Government Bonds in India | Types, Advantages, and How to Invest (39)

Government Bonds in India | Types, Advantages, and How to Invest (40)

ANDHRA PRADESH CAPIT...
INE01E708016

Price
₹ 200,000

Coupon
10.32%

Yield
14.75%

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TAMIL NADU GENERATIO...
INE340M08160

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₹ 1,000,000

Coupon
9.7%

Yield
14%

Rating
A

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WEST BENGAL STATE EL...
INE411L07015

Price
₹ 1,000,000

Coupon
9.34%

Yield
13.77%

Rating
A-

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WEST BENGAL STATE EL...
INE411L07031

Price
₹ 1,000,000

Coupon
10.85%

Yield
12.58%

Rating
B

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ANDHRA PRADESH CAPIT...
INE01E708040

Price
₹ 200,000

Coupon
10.32%

Yield
10.52%

Rating
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CHHATTISGARH STATE P...
INE512S08021

Price
₹ 1,000,000

Coupon
10.36%

Yield
10.51%

Rating
A

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KERALA FINANCIAL COR...
INE818F07070

Price
₹ 250,000

Coupon
8.99%

Yield
10.5%

Rating
AA

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RAJASTHAN RAJYA VIDY...
INE572F09202

Price
₹ 1,000,000

Coupon
8.65%

Yield
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Government Bonds in India | Types, Advantages, and How to Invest (49)

WEST BENGAL STATE EL...
INE411L07023

Price
₹ 1,000,000

Coupon
9.34%

Yield
10.3%

Rating
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Government Bonds in India | Types, Advantages, and How to Invest (50)

ANDHRA PRADESH CAPIT...
INE01E708057

Price
₹ 200,000

Coupon
10.32%

Yield
10.27%

Rating
A+

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Government Bonds in India | Types, Advantages, and How to Invest (51)

RAJASTHAN RAJYA VIDY...
INE572F11257

Price
₹ 500,000

Coupon
0%

Yield
10.15%

Government Bonds in India | Types, Advantages, and How to Invest (52)

KARNATAKA STATE FINA...
INE549F08509

Price
₹ 1,000,000

Coupon
9.24%

Yield
10%

Rating
AA-

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Government Bonds in India | Types, Advantages, and How to Invest (53)

UP POWER CORPORATION...
INE540P07236

Price
₹ 1,000,000

Coupon
9.75%

Yield
10%

Rating
AA-

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RAJASTHAN RAJYA VIDY...
INE572F11182

Price
₹ 500,000

Coupon
0%

Yield
9.97%

Rating
A

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Types of Government Bonds

You might be wondering, “How many types of bonds are available in India” in which you can invest?

There are many types of bonds in India depending on the issuer, coupon rates and tenure. Depending on the bond issued, bonds come with varying interest rates and risks.

Fixed Rate Bonds

Fixed-rate bonds are financial instruments that guarantee investors a set interest rate throughout the bond's duration, resulting in regular interest payments until the bond matures.

Sovereign Gold Bonds

Sovereign Gold Bonds (SGBs) are investment options offered by the Government of India, allowing individuals to invest in gold without the need for physical ownership or storage. These bonds provide a convenient paper-based form of gold investment.

Inflation Indexed Bonds

Inflation-indexed bonds, referred to as inflation-linked bonds, are investment vehicles where the principal and interest payments adapt according to fluctuations in the inflation rate. These bonds safeguard against inflation by preserving the investment's value in line with increasing prices.

7.75% GOI Savings Bond

The RBI 7.75% Savings Bonds are a secure investment option suitable for both new and risk-averse investors who seek consistent and reliable returns while avoiding significant risks.

Bonds with Call or Put Option

Government Bonds with call or put options are financial instruments that offer the issuer or investor the ability to exercise certain rights pertaining to the bond before it reaches its maturity date.

A bond with a call option provides the issuer with the privilege to repay or "call back" the bond before its designated maturity, while a bond with a put option allows the investor to sell the bond back to the issuer prior to its maturity.

Zero Coupon Bonds

Zero coupon bonds, also called discount bonds, are financial assets that do not offer regular interest payments to bondholders. Rather, they are issued below their face value and generate returns for investors as their value appreciates over time.

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How to invest in Government Bonds

Investment in Bonds can be done in a few easy steps with Quick KYC, Bond Selection and a convenient payment gateway.

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Features of Government Bonds
  • Low Default Risk.
  • These bonds are be either fixed rate or may carry a floating rate of interest.
  • Comparatively Low Returns.
  • Governments bonds can be used as a collateral loan against borrowings on a short-term basis in the repo market. These can be exchanged for cash along with a repurchase agreement of the bond in the future specified date at the end of the contract. You can buy government bonds to earn stable return and enjoy the benefit of capital preservation.
  • Bidding through RBIs e-Kuber platform for accessing the government securities market (both primary and secondary) through the RBI’s Retail Direct.
  • Safety: Govt securities are considered to be one of the safest investment options as they are backed by the credit of the government.
  • Liquidity: Government bonds are highly liquid and easily traded on the stock exchange.
  • Tax Benefits: Some government bonds, such as capital gains bonds, offer tax benefits to investors.
  • Investment Size: Government bonds can be purchased in denominations as low as Rs. 1000, making them accessible to small investors.

Frequently Asked Questions

A government bond is a financial instrument issued by the Government of India to fund its activities or initiatives through borrowing.

Investing in Government Bonds is a seamless process: open an account with a reputable broker, select the desired bonds, place an order, and diligently monitor your investments.

Some of the popular Government Bond are Sovereign Gold Bonds, SDLs (State Development loans), Municipal Bonds, Zero–Coupon Bonds, and Treasury Bills.

Yes, Government Bonds come with the sovereign Guarantee, which is a kind of assurance given by the Government of India to repay the principal amount and fulfil interest payments.

Some Bonds issued by the Government and Public sector companies provide tax benefits to the investor. But the interest income earned from these Bonds is not subject to income tax.

The RBI( Reserve Bank of India) issues Government Bonds India.

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