Are G-secs good option to invest in India?
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G-secs are a good option to invest in India because of their attractive interest rates. Agency securities (also called G-secs) are issued by the Government of India and sold through various banks. They are fixed income securities like bonds, where the issuer promises to pay an investor interest at iRead more
G-secs are a good option to invest in India because of their attractive interest rates.
See lessAgency securities (also called G-secs) are issued by the Government of India and sold through various banks. They are fixed income securities like bonds, where the issuer promises to pay an investor interest at intervals and then repay the principal amount after a specified period of time.
G-secs are a great option. The most common g-sec is the 10 year g. It has an annual return of 7.6%. If you have the money, you can purchase the 10 year G-secs right now, and after 10 years your investment will be worth Rs. 1,00,000.
G-secs are a great option. The most common g-sec is the 10 year g. It has an annual return of 7.6%. If you have the money, you can purchase the 10 year G-secs right now, and after 10 years your investment will be worth Rs. 1,00,000.
See lessNo risk of default by the Government makes G-secs immune to credit risk. But they are exposed to interest-rate risk, just like other tradeable bonds. When interest rates rise, or expected to rise (fall), G-sec prices can fall (rise) leading to a capital loss (gain). You must be prepared to see the vRead more
No risk of default by the Government makes G-secs immune to credit risk. But they are exposed to interest-rate risk, just like other tradeable bonds. When interest rates rise, or expected to rise (fall), G-sec prices can fall (rise) leading to a capital loss (gain).
You must be prepared to see the value of your investment in G-secs going down if interest rates start to pick up. This will, however, be only a mark-to-market loss (and will not be a realized loss) unless you sell the G-secs. So, if you hold them until maturity, you can avoid the capital loss, if any.
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