List of Government Bonds in India 2023: What You Need to Know

If you are looking for a safe and low-risk investment option, you might want to consider investing in government bonds. Government bonds are securities issued by the central or state government of India to borrow money from the public. They are backed by the sovereign guarantee of the government, which means that the government will repay the principal and interest on time.

But how do you choose the right government bond for your investment needs? What are the different types of government bonds in India? How do they differ in terms of interest rate, maturity period, and tax implications? In this blog post, we will answer these questions and more. We will also provide you with a list of government bonds in India 2023 that you can refer to before making your investment decision.

Types of Government Bonds in India

There are different types of government bonds in India, each with its own features and benefits. Here is a brief overview of some of the most common ones:

Treasury bills (T-bills): These are short-term government bonds that mature in 91 days, 182 days, or 364 days. They are issued at a discount and redeemed at face value at maturity. They do not pay any interest or coupon, but the difference between the purchase price and the redemption price is the return for the investor. T-bills are highly liquid and ideal for short-term investment needs.
Cash management bills (CMBs): These are also short-term government bonds that are issued to meet the temporary cash flow mismatches of the government. They have a maturity period of less than 91 days and are also issued at a discount and redeemed at face value. They are similar to T-bills, but have more flexibility in terms of issuance and maturity dates.
Dated securities: These are long-term government bonds that have a fixed maturity period ranging from 5 years to 40 years. They pay a fixed or floating interest rate every six months until maturity. The interest rate is determined by the market forces and the credit rating of the government. Dated securities are suitable for long-term investment goals and offer capital appreciation as well as regular income.
Inflation-indexed bonds (IIBs): These are long-term government bonds that are linked to the inflation rate in the country. They protect the investors from the erosion of purchasing power due to inflation. They pay a fixed real interest rate plus an inflation-adjusted principal amount at maturity. The inflation adjustment is based on a specific index, such as the consumer price index (CPI) or the wholesale price index (WPI).
Floating rate bonds (FRBs): These are long-term government bonds that have a variable interest rate that is reset periodically based on a benchmark rate, such as the repo rate or the treasury bill rate. They provide protection to the investors from interest rate fluctuations and offer higher returns when interest rates rise. They also have a put or call option that allows the investor or the issuer to redeem the bond before maturity at a predetermined price.
State development loans (SDLs): These are long-term government bonds that are issued by the state governments to finance their development projects and fiscal deficits. They have a maturity period of 10 years and pay a fixed interest rate every six months. They are slightly riskier than central government bonds, as they depend on the fiscal health and credit rating of each state. However, they offer higher returns than central government bonds to compensate for the higher risk.