May 21, 2024

On 26th November 2021, Prime Minister Narendra Modi launched the RBI Retail Direct scheme, which allows retail investors to buy government securities directly from the Reserve Bank of India (RBI).

What are Government Securities?

Government securities are bonds issued by the government to raise funds for various developmental activities. These securities are considered a safe investment option as they are backed by the government.Earlier, retail investors could only buy government securities through primary dealers or brokers.
However, with the launch of RBI Retail Direct, retail investors can now directly invest in these securities through the RBI.



How Does RBI Retail Direct Work?

To invest in government securities through RBI Retail Direct, investors need to have a savings account with any bank in India. They can then register on the RBI Retail Direct portal and submit the required documents, including KYC (know your customer) details.

Once their registration is approved, investors can log in to the portal and place orders for government securities.

The orders will be processed on a first-come, first-served basis.Investors can invest in government securities with a minimum investment of Rs 10,000 and in multiples of Rs 1,000 thereafter.

The RBI Retail Direct scheme also offers an online platform for investors to view their investments and track their portfolio.

What are the Benefits of RBI Retail Direct?

Convenience

RBI Retail Direct allows retail investors to directly invest in government securities from the comfort of their homes. They don’t have to go through brokers or dealers, which saves them time and effort.

Transparency

Investors can view their investments and track their portfolio on the RBI Retail Direct portal. This enhances transparency and helps investors make informed investment decisions.

Safety

Government securities are considered a safe investment option as they are backed by the government. By investing in government securities through RBI Retail Direct, investors can ensure the safety of their investments.

Diversification

Investing in government securities can provide diversification to an investor’s portfolio. It can help balance the risk associated with other investments such as equities or mutual funds.

Better Returns

Government securities offer better returns compared to traditional investment options such as fixed deposits or savings accounts.

By investing in government securities through RBI Retail Direct, investors can earn better returns on their investments.

RBI Retail Direct is a great initiative by the government to promote retail investment in government securities. It offers convenience, transparency, safety, diversification, and better returns to investors.

Retail investors can now invest in government securities with as low as Rs 10,000 through the RBI Retail Direct portal. This scheme is a step towards financial inclusion and empowerment of retail investors in India.

Zarina Khan

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