Government Securities | IDFC FIRST Bank

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What are Government Securities
(G-Secs)?

Government Securities, known as G-Secs, are debt instruments issued by the Government of India and state governments to raise funds for their borrowing needs. The Reserve Bank of India manages issuance and auctions of government securities. G-secs include treasury bills, dated bonds, state development loans and STRIPS, each with a different tenure.

Every category carries sovereign backing, which places default risk near zero. Investors lend money to the government and receive interest at fixed or floating rates, along with principal repayment at maturity. G-secs trade actively in the primary and secondary markets and price other fixed income instruments in India.

Types of Government Securities
in India

The Government of India issues securities of varying tenure and structure to meet short-term and long-term borrowing needs. These instruments differ in maturity, coupon payment and issuing authority, giving investors options based on their time horizon and cash flow needs.

Treasury Bills

T-Bills

T-bills are short-term instruments with maturities of 91, 182 or 364 days. They carry no coupon and are issued at a discount to face value. The return equals the difference between the issue price and the redemption value paid at maturity. RBI conducts weekly auctions for these instruments.

Government Bonds (Dated G-Secs)

Dated G-Secs

A dated govt bond carries a fixed or floating coupon paid semi-annually, with maturities ranging from 3 to 50 years. The 10-year G-Sec serves as the benchmark for the broader bond market. Principal is repaid in full at maturity, and the coupon rate is fixed at issuance.

State Government Securities

SGS are dated securities issued by state governments to fund their fiscal deficits. The structure and auction process mirror those of central government bonds, though yields are usually a notch higher due to state-level credit spreads. RBI manages issuance on behalf of states.

STRIPS (Separate Trading of Registered Interest and Principal Securities)

Separate Trading of Registered Interest and Principal Securities

STRIPS separate a dated G-Sec's coupon and principal payments into individual zero-coupon instruments. Each piece can be traded on its own. This suits investors who want a fixed cash flow on a known future date without reinvestment risk.

Government Securities Interest Rates

Rates move with RBI policy, inflation and auction demand. Figures below cover the benchmark tenures RBI reports most often; each category also trades in other tenures, since dated bonds range from 3 to 50 years and SGS vary by state and issue.

Instrument

Tenure

Indicative Yield

Treasury bill

91 days

~5.25%

Treasury bill

182 days

~5.47%

Treasury bill

364 days

~5.66%

Government bond (dated G-Secs)

10 years

~6.75%

State development loan

Varies by state and tenure

Trades at a spread over comparable-maturity G-Secs

STRIPS

Varies by underlying bond

Linked to the yield curve

as on 5/8/2026

Govt bonds interest rates change with each auction cycle and RBI policy review. Investors should check live rates before placing an order.

Key Features of Investing in G-Secs with IDFC FIRST Bank

Get Started with Government Securities

Who should invest in government securities?

Who can apply?

How to invest in government securities with IDFC FIRST Bank?

Alternatively, investors can open a Retail Direct Gilt (RDG) account on the RBI Retail Direct portal using their PAN, email and mobile number, complete KYC and link their IDFC FIRST Bank account for payment and settlement. Additional details on eligibility, account opening, investment options, and platform features are available on the RBI Retail Direct portal.

Learn more about government securities, their benefits, and how to invest in them through IDFC FIRST Academy course

Why choose IDFC FIRST Bank for government securities investment?

FAQs

A government security is a debt instrument issued by the central or state government to borrow funds, carrying a sovereign guarantee on interest and principal repayment.

Treasury bills, dated govt bonds, state development loans and STRIPS are the main types issued in India.

A PAN card, bank account and KYC details are required for both routes. Using IDFC FIRST Bank's mobile banking app needs a demat account, while RBI Retail Direct needs a Retail Direct Gilt account instead.

The minimum investment is Rs 10,000 face value, with additional investment in multiples of Rs 10,000.

Dated government bonds and State Government Securities (SGS) pay interest semi-annually. T-bills and STRIPS are zero-coupon and pay the full return only at maturity.

Yes, G-Secs carry a sovereign guarantee from the government of India, making default risk near zero.

G-secs carry sovereign backing and market-linked pricing, while FDs offer fixed returns with deposit insurance up to Rs 5 lakh. The choice depends on the investor's goals.

Yes, retail investors can invest in govt bonds through the RBI Retail Direct portal, the IDFC FIRST Bank mobile banking app, or other banks and brokers offering access.

You can learn more about govt bonds on the RBI Retail Direct portal and the RBI website as they publish detailed information, auction calendars, govt bonds interest rates and yield data.

G-secs are issued by the government with sovereign backing. Corporate bonds are issued by companies and carry credit risk based on the issuer's rating.

Treasury bills are themselves a type of government security, but they are short-term, zero-coupon instruments maturing within a year. The wider G-sec category also includes longer-tenure, coupon-bearing bonds up to 50 years.

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Government Securities (G-Secs)

What are Government Securities
(G-Secs)?

Why Invest in Government Securities?

Sovereign guarantee keeps credit risk close to zero

Retail investors can access G-Secs directly through RBI Retail Direct portal or IDFC FIRST Bank's mobile banking app

Wide range of tenures from 91 days to 50 years suits different goals

Suitable for portfolio diversification alongside equity and corporate debt

Regular interest income through fixed or floating coupons

No upper limit on investment amount for eligible investors

High liquidity in the secondary market for most dated securities

A practical way to invest in govt bonds for the first time without complex paperwork