Why invest in Government securities?

What are the advantages of investing in Government Securities? are there any at all?

Yes. Let us look at some of them:

1. No TDS – immaterial of amount there is no TDS / no witholding tax on the principal. Very useful if you are a big company but have no tax liability because of brought forward losses

2. zero risk of default.

3. extremely liquid – especially in the 10 year paper market

4. Regular income product – twice a year, attractive returns normally

5. Loans available against it / accepted by all for security deposit.

6. Can be held in demat form

7. Frankly only place to invest with a 20 year view – there can be no AAA paper with a 20 year duration!

Related Articles:

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

One Response to “Why invest in Government securities?”

  1. Mani,

    Thanks for the article. Could you please let us know how one goes about investing in Govt. securities? Are they available for retail investors other than through Mutual funds? Thanks!


Leave a Reply

This blog is kept spam free by WP-SpamFree.