Government securities

why would anyone invest in G-sec (central and state) with 4 to 6.7 percent lock in period of 5 to 30 years. when i can get 6.8 percent FD interest and more without lock in period.

Also,

Same applies for T-Bills

Yeah, that is up to user. 1. All banks are not offering 6.8%, only a few.
2. Few may want to trade them, if rates go down then prices will go high.
3. Gsecs are sovereign guarantee but only upto 5 lakhs of fd has sovereign guarantee.
4. Few may pledge gsecs and take loan or trade etc.

These are very short term, so can be ignored.

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How can we redeem the security 732GOI2024 at appropriate value? I found that there is very less liquidity in the market for this security. My friend invested in this through Zerodha.

At the time of maturity, will it be automatically sold and the amount credited to the bank account linked to Zerodha?

Right or can sold on kite but as you mentioned should mange illiquidity.

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In SDL

6.68 % HR 2039 6.89 % 03-05-2021 6:00 PM
In the above SDL ,is 6.68% interest fixed ? or Does it vary?

RJ SDL 2031 6.77 % 03-05-2021 6:00 PM ,
Here what’s the interest rate promised ? Because the 6.77% is the indicative yield

The interest rate would be fixed in this case. This specific SDL seems to have listed on the exchange on August 20th, 2020 (NSE Circular) and the current auction for it appears to be a re-issue of it.


As this appears to be a new SDL (as no interest rate is mentioned), the interest rate for it would be determined in the yield based auction.

This RBI FAQ explains about the different types of auctions that happen for government securities (both issued by the Central Government or the State Governments).

2 Likes

since the interest rate is fixed and listed on the exchange.

  1. Is the interest paid on the principal invested or the last traded price?
    2.What is the amount paid back after the maturity, is it the principal invested or Last traded price?

As the RBI FAQ mentions, the interest is paid on the face value of the bond (which is generally Rs.100) -

1.5 Dated G-Secs are securities which carry a fixed or floating coupon (interest rate) which is paid on the face value, on half-yearly basis. Generally, the tenor of dated securities ranges from 5 years to 40 years.


At maturity, the face value of the bond is paid back. The RBI FAQ mentions about it -

Face Value

Face value is the amount that is to be paid to an investor at the maturity date of the security. Debt securities can be issued at varying face values, however in India they typically have a face value of â‚ą100. The face value is also known as the repayment amount. This amount is also referred as redemption value, principal value (or simply principal), maturity value or par value.

Maturity Date

The date when the principal (face value) is paid back. The final coupon and the face value of a debt security is repaid to the investor on the maturity date. The time to maturity can vary from short term (1 year) to long term (30 years).

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When i purchase G-SEC using Coin will it be displayed in kite holding section? @ShubhS9

Yes, G-Secs are visible on the Holdings page (Refer to this support page)

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The T bills before auction contains only the indicative yield , After the auction how can we know the exact yield that was decided.

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Based on the price, I guess.

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hi all,
i have brought Gsec on nov 2021 throught zerodha coin and pledge it and used for trading.
my half yearly interest payout is on 15th may 2022, but still interest not credited in my bank account(tdy 17th may).
i don’t know y. please any one help if know the solution…/

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i got my interest payment by 17th evening.
i got answer too.
15th - sunday,
16th - clearning holiday.
so only delay in getting my payout…

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@siva Where can I see the allotted G-Secs in Zerodha?
How to find the Maturity Date of a G-Sec?

Thanks.

Alloted G-Secs will show in your holdings on Kite as well as Console. You can check date of maturity on RBI website.

Got it, thanks.