Types of Government Securities

Types of Government Securities- In the society of investing, government security concerns to various investment products issued by a control body. According to The Reserve Bank of India, government securities as tradable devices are issued by the State Government or the Central Government. 

Given below are some types of government securities offered by The Reserve Bank of India. Here:

• Treasury Bills- These are short-term government securities with developments of up to 1 year. Currently, they are published in three different types — the ninety-one day, eighty-two-day, the one hundred sixty-four day, and the three-hundred bills. Since they don’t pay interest the profit of the investor is the difference between the discounted issue price and the face value. To issue the treasury bills, the RBI performs weekly auctions.
• Cash Management Bills: These are short-term securities that are flexible as they can be issued when required. Their date of issue and tenure are based on the temporary cash needs of the government, but, the chosen tenure must be less than 91 days to be precise. They are given at discounts on the face value by RBI just like treasury bills.
• State Development Loans: Basically, these are dated securities that are issued by the State government for meeting their budget requirements. The issues are auction through the ‘Negotiated Dealing System’ once every two weeks. When we talk about their rates, they are slightly higher as compared to Dated Government Securities.
• Zero-Coupon Bonds: These bonds are issued at discount to face value & redeemed at par. On January 19th, 1994 Zero-Coupon Bonds were issued. The tenor is fixed for the security; the securities do not carry any interest rate or coupon. At last, the security is redeemed at face value on its maturity date, etc. 

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