The Reserve Bank of India’s Retail Direct platform has emerged as a convenient avenue for small investors to directly invest in government securities (G-Secs). Since its inception in November 2021, the platform has seen notable adoption, with the number of registered users more than doubling in the past year. By May 19, 2025, over 2.5 lakh accounts had been opened, facilitating transactions worth ₹9,300 crore.
G-Secs are debt instruments issued by the Central or State governments. These instruments are extremely safe due to their sovereign guarantee. Through the Retail Direct portal, individuals can invest in a range of G-Secs, State Development Loans (SDLs), Floating Rate Savings Bonds, and Sovereign Gold Bonds (SGBs).
Compared with traditional intermediaries like banks, primary dealers and stock exchange-based platforms such as BSE Direct and NSE goBID, RBI’s Retail Direct offers a more streamlined and economical experience. It offers access to both primary and secondary markets. Additional features include consolidated account statements, real-time auction updates, yield information and an efficient grievance redressal system.
One of the major advantages of this platform is the absence of brokerage or commission charges. Investors also don’t incur any fees for account set-up or maintenance.
How to transact
The process of opening an account is entirely online (rbiretaildirect.org.in). Using Aadhaar and PAN, individuals can complete KYC within about 30 minutes and login credentials are typically sent within two-three days. Payments for purchases can be made via net banking, UPI or NACH.
Investors can participate in primary auctions and trade in the secondary market. In primary auctions, non-competitive bidding allows individuals to invest without quoting a specific yield or price and securities are allocated at the weighted average yield determined in competitive bidding. For secondary market trading, the platform is integrated with the NDS-OM system. Purchases and sales are settled directly from linked bank accounts and securities are held in dematerialised form in the retail direct gilt (RDG) account. Investors receive interest payments and maturity proceeds directly into their bank accounts. Income earned is taxable according to the investor’s applicable tax slab.
A mobile app replicating the desktop platform’s functions has also been launched. This app has secure login through biometric authentication and enables users to manage their portfolios and participate in bond auctions from their phones.
Points to note
Investors can place bids ranging from ₹10,000 to ₹2 crore in a single auction.
When investing in G-Secs, key considerations include the yield and tenure of the bonds.
As a retail bidder, you receive yields determined in auctions. G-Sec yields move up and down depending on RBI and MPC actions, liquidity conditions, institutional demand and other factors.
Choosing an appropriate maturity period is equally important and should align with an investor’s financial objectives or cash-flow needs. You can check the auction calendars available on the website to identify bonds that match your timeline.
Investors need to be aware of limited liquidity in the secondary market for G-Secs. It is best to be prepared to hold your investments until maturity.
Choose the right bond
Dated G-sSecs and SDLs are well-suited for generating consistent income with absolute capital safety. Dated G-Secs are available with tenures from one year to 40 years and pay interest every six months. Over the last 10 years, the 10-year Indian government bond yield has moved between 5.7 per cent and 8.2 per cent. Currently, it stands at around 6.2 per cent. Comparatively, SBI offers 6.3 per cent interest on 5- to 10-year fixed deposits for general customers and up to 7.3 per cent for senior citizens. Some private and small finance banks offer higher deposit rates.
Issued by State governments, SDLs carry similar semi-annual interest payouts and tenures ranging from one to 40 years. SDLs usually offer slightly higher returns—typically 25-50 basis points more than equivalent Central government bonds. Recently, new SDLs have been issued at yields between 6.7 per cent and 7.34 per cent.
GOI Floating Rate Savings Bonds offer a current return of 8.05 per cent, adjusted every six months based on the National Savings Certificate rate. With a seven-year term, these instruments can be attractive, though returns could drop if interest rates decline.
For short-term investment needs, Treasury Bills offer tenures of 91, 182, and 364 days and are ideal for parking surplus funds. They are issued at a discount and redeemed at face value. T-bill rates have ranged between 2.9 per cent and 7.8 per cent over the past decade, and currently average around 5.7 per cent due to excess liquidity in the banking system. Notably, a significant portion—around 70 per cent—of transactions on the Retail Direct platform involves T-bills.
Published on May 31, 2025
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