How to Buy Bonds via the Retail Direct Scheme?

How to Buy Bonds via the Retail Direct Scheme?

Indian Market
by 5paisa Research Team Last Updated: 2022-08-08T18:56:01+05:30

For the investors who always wanted to participate in government debt but did not know how to do it, there will be this all new “Retail Direct Scheme”.

This scheme will facilitate retail investors to direct buy government securities and other government issued bonds through an online portal making the process simple and absolutely transparent. Investors just need to open a Retail Direct Gilt Account with the RBI.

The entire account opening and account operating process is online and the necessary KYC documents like your bank details, PAN card details, Aadhar card details, etc must be uploaded online.

A valid email id for registration and a valid mobile number for registration is mandatory for participation in the Retail Direct scheme.

Under the Retail Direct Scheme, investors have the choice of investing in 4 broad asset classes viz. dated government securities, short term treasury bills, state development loans (SDL) and sovereign gold bonds.

In the first 3 cases, the minimum investment will be Rs.10,000 and in case of sovereign gold bonds, the minimum investment will be 1 gram of gold. G-Secs can be bought in the primary auction or in the secondary market.

Individuals intending to buy government securities via primary auctions cannot place competitive bids. That means, they cannot specify the price at which they want to purchase the particular security. All bids by retail individuals have to necessarily be non-competitive only where the investors have to be price takers.

These securities bought through the retail direct scheme will be held in a specified gilt account with the RBI and not in your existing demat account.

However, in case you are already having government securities in your demat account, the same can be moved to the gilt account under the RBI Value Free Transfer (VFT) guidelines. Investors need to raise a request for the same in the online portal.

Also Read:-

Factors to Consider Before Investing in Bonds Directly

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