Government Securities
Government securities are issued by or on behalf of the Government. They are also called bonds or debt products. Since they are issued by the Government, the risks associated are low. Both the primary market and the secondary markets trade in government securities. Government securities includes notes, treasury bills and savings bonds.
In some cases, the return, commonly known as coupon is fixed and you may buy the bond at a discount and redeem at face value on maturity or you may also opt to collect the only interest component half-yearly and obtain the face value on maturity. The tenor, coupon paying terms and returns offers a number of variety in government securities.
Features
- They can be held in demat form
- As they are traded in secondary markets, the liquidity of funds is also ensured
- The tenor may be as long as 30 years.
- No default risk.
Benefits
- They are very safe
- The returns, though not very high, are predictable
- Returns are better than other safe options like banks.
- Since, they are professionally managed, returns meet expectations.
- They are perfectly suited for the risk-averse.
- They are also a profitable medium of investment when you want to save for the long term.
- The investor can take advantage of indexation while filing income tax returns.
This article basically makes the reader aware of the various risk free govt. securities.
also called debt products.It describes the advantages and is totally in favor of these services. All the features described here, are well guiding and are an add-on to one’s knowledge. I appreciate the writer’s effort in making the reader well-known to it.
Thanks Garima, it was great hearing from you. Nowadays, an individual has a variety of investment products to choose from. Let me know about your risk appetite and i will guide you about suitable products