State Development Loan (SDL) is a bond issued by state governments to fund their fiscal deficit. Each state can borrow up to a set limit. SDLs pay interest on a half-yearly basis and repay the principal amount on maturity. These bonds are issued generally for 10-year but they can be issued with other maturities too. SDLs are less riskier than AAA-rated corporate bonds as it has a sovereign guarantee. The yield on these papers are usually higher than the benchmark government bonds. Investors who are risk-averse and looking for security on investment can buy these securities. SDL issues are managed by the Reserve Bank of India.