How to use RBI Retail Direct to buy government bonds online

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What is RBI Retail Direct?

RBI Retail Direct is a Reserve Bank of India (RBI) online platform where retail investors can purchase and sell government securities (G-Secs) directly. The platform includes Treasury Bills (T-Bills), Government of India Bonds, Sovereign Gold Bonds (SGBs), and State Development Loans (SDLs). The platform will open up the government debt instruments to the masses, and retail investors will have access to the previously institution-dominated market.

How to apply for RBI Retail Direct

To open the platform, you must get an account of Retail Direct Gilt (RDG) from the web portal (rbiretaildirect.org.in). Registration is cost-free and web-based. You must be an Indian resident in India with a valid PAN, Aadhaar number, bank account, email ID, and mobile number.

1. Access RBI Retail Direct portal.

2. Select 'Open Retail Direct Gilt Account'.

3. Fill in personal information like PAN and Aadhaar.

4. Aadhaar completion and OTP verification of mobile number.

5. Link bank account and submit a cancelled cheque.

6. Generate login credentials upon verification.

After opening an RDG account, you can then login to bid in primary auctions or purchase securities in the secondary market.

Purchasing government bonds on the platform

There are two significant means of purchasing securities in RBI Retail Direct:

1. Primary Market (Auction):

Investors can invest through RBI's weekly auction of freshly floated securities. You can bid in non-competitive mode, that is, without a price. The allotment is on average price decided in the auction.

2. Secondary Market:

The platform being linked to NDS-OM (Negotiated Dealing System - Order Matching), permits trading in securities round-the-clock. In this way, the price discovery and liquidity would be available at par with that of a stock exchange.

Minimum investment is typically ₹10,000 and must be in multiples of ₹10,000 for most of the G-Secs.

Interest, Taxation, and Maturity

Fixed rate of interest is paid by the Government securities, usually half-yearly. The interest is deductible from tax in your applicable slab of income. Face value is credited to your linked bank account on maturity. The bonds are kept in demat form in your RDG account.

FAQs

Q1: Is RBI Retail Direct free to open or to hold the RDG account?

No, there is no cost for registration and holding an account.

Q2: Is investment by NRIs possible through RBI Retail Direct?

There is yet resident individual-only enrolment for registering and trading on the website.

Q3: Is RBI Retail Direct investment in G-Secs secure?

Yes, they are backed by central or state governments and have very low credit risk, thus one of the safest investments.