RBI Retail Direct App: How Regular Public Can Buy Bonds Now in Minutes!

May of this year started with cheerful news for conservative investors. Reason? Because the RBI Retail Direct app was launched! Earlier the investors had to go through individual broker apps for buying G-Sec. But with this app, even a regular public like you and me can buy the bonds in minutes. And that too under the RBI direct retail scheme.

How? Let’s discuss it!

What is the RBI Retail Direct App?

As the term suggests, it is an official app launched by RBI where you can buy & sell government bonds and securities  in India, including-

• Treasury Bills
• Sovereign Gold Bonds
• Central Govt. Bonds
• State Govt. Bonds

The best part- the interest that you’ll receive during the maturity process, will be directly deposited into your bank account on due dates.

It works well in both primary and secondary markets. 

RBI Retail Direct App was launched to simplify the process of investing in government bonds and make them more accessible to the general public.

It works under the RBI direct retail scheme that was launched in November 2021. You need to maintain an RDG Account to operate in the RBI Retail Direct app as well as the scheme. 

Is it good to invest in RBI Retail Direct App?

Yes absolutely! Recently, RBI has introduced a few features on the RBI Retail Direct Mobile app to improve the experience for participating in the G-Sec market through the mobile app-

• Quick Access Menu: It refers to the screen with separate icons for quick access to various pages of the apps like info on govt. Securities, primary auction, secondary market, etc.
• Easy Switching: You can easily switch between two windows i.e. RBI Retail app and the NDS-OM Retail app with the same login.
• Guided Tours:  In case you are new to the app or need guidance on how to use it, you can just go through the demo videos that explain how to use the NDS-OM Retail and RBI Retail Direct App.

Note: The acronym NDS-OM refers to the  Negotiated Dealing System-Order Matching Segment. It is a screen-based, anonymous, electronic trading system for government securities (G-secs) in the secondary market. The Reserve Bank of India (RBI) introduced NDS-OM in August 2005.

The NDS-OM retail app allows individual investors to participate in the G-sec market without needing to go through a bank or intermediary. Investors can use their Retail Direct Gilt (RDG) accounts for their transactions and holdings in G-secs. 

What is Retail Direct Gilt (RDG) Account? 

An RDG (Retail Direct Gilt) Account is an account that allows retail investors to buy and sell government securities (G-Secs) directly with the Reserve Bank of India (RBI). 

Let’s briefly look at the features of the RDG account-

• Investment Options: You can place bids in the primary auctions for Central Government securities, including Treasury Bills, Sovereign Gold Bonds, and securities issued by State Governments. Also, you can buy and sell G-secs in the secondary market.
• Account Opening: Investors can open an RDG Account online through the RBI Retail Direct Portal.
• Account Maintenance: The is no fee for opening and maintaining an RDG account.
• Other Services: The scheme provides services such as transaction and balance statements, nomination facility, pledge or lien of securities, and gift transactions. 

What are Government Securities?

Government Securities are the financial instruments that the government uses to borrow money from the public.

In short, when you buy G-Sec, you’re lending money to the government and earning interest. Hence, it is the best asset class for conservative investors who avoid risk.

Features of Government Securities

• Risk: They are considered low-risk investments because they are backed by the government that issues them.
• Interest: They pay interest periodically or a coupon and the full principal amount is returned at maturity.
• Maturity: They can be issued for short-term or long-term periods. Short-term securities, with a maturity of less than one year, are called Treasury Bills (T-Bills), while long-term securities are called Government Bonds or Dated Securities. 
• Uses: The government uses them to fund daily operations, and special projects, and to bridge budget deficits. Central banks also use them to control inflation.
• Trading: Investors can hold them until maturity or sell them to other investors on the secondary bond market.

In India, the RBI (Reserve Bank of India) auctions government securities in the primary market.

Some other ways to invest in G-Sec & Bonds in India

Don’t you wonder how investors used to invest in Government securities and bonds before the launch of the RBI Retail Direct app? 

Here are some conventional methods to invest in G-Sec-

• NSE goBID or BSE Direct: You can participate in non-competitive bidding on the NSE’s goBID or BSE’s BSE Direct web portal or mobile application.
• Banks and Post Offices: You can submit a form, your Demat account number, and relevant documents.
• Brokerage houses: Investors need a Demat account and a trading account with the firm.
• Mutual Funds and ETFs: You can also purchase a mutual fund or ETF that specializes in bonds.

Latest News on G-Sec

As you know, the gross market borrowing amount for the FY25 is Rs.14.01 lakh crore. Out of this, the finance ministry announced that Rs.6.61 lakh crore (47.1%) will be borrowed in the second half of this year including Rs.20,000 crore of Sovereign Green Bonds.

Here is the calendar for issued bonds under different maturities-

Final Words: Is RBI Retail Direct App Safe?

Yes! This app is completely safe and secure. It has a smooth and simple interface that allows you to invest seamlessly. Also, it doesn’t involve any intermediaries. Hence, it is completely free of charge. You need to pay only the payment gateway fees.

However, the minimum investment amount differs based on the different government securities. 

Try RBI Retail Direct App and share your experience in the comments section below 🙂