The Reserve Bank of India (RBI) has launched the Retail Direct Mobile App to facilitate a seamless and convenient access to the retail direct platform for retail investors and ease of transacting in government securities (G-Secs).
With the launch of the retail direct mobile app, retail investors can now transact in G-Secs using the mobile app on their smartphones. Investors using Google Android can download the app from the Play Store and those using iPhone iOS can download it from App Store. The mobile app can also be downloaded using a QR code, the RBI said in a circular on Tuesday.
RBI Retail Direct portal
The central bank launched in November 2021 the retail direct portal to facilitate retail investors to open their Retail Direct Gilt accounts with the RBI under the Retail Direct Scheme. The scheme allows retail investors to buy G-Secs in the primary auctions as well as buy and sell G-Secs in the secondary market.
What are the kinds of G-secs that you can invest in through the Retail Direct platform?
- Government of India Treasury Bills (T-Bills)
- Government of India dated securities (dated G-Sec)
- State Development Loans (SDLs)
- Sovereign Gold Bonds (SGB)
Why should you open a Retail Direct Gilt (RDG) account?
Opening an RDG account will allow individuals to buy Government securities directly in the primary market (auctions) as well as buy/sell in the secondary market. For the retail investor, Government securities offer an option for long term investment.
Advantages for retail investors are following:
G-sec are risk free: G-sec in the domestic market context are risk free and carry no credit risk.
G-sec offer decent yields for longer duration. G-sec yield curve extends up to 40 years. With Government issuing securities at different points on the yield curve, G-sec offer an attractive option for savers who need low risk investment options for longer durations.
G-sec offer prospect of capital gains: As there is an inverse relationship between bond price and interest rate, there is a prospect of capital gains when the interest rates moderate. One, however, must be conscious of market risks that could result in losses in case the interest rate cycle reverses.
G-sec have reasonable liquidity: G-sec have reasonable liquidity and can be transacted on NDS-OM. With the introduction of Retail Direct Portal, retail investors can now participate easily in primary and secondary market.
G-sec help to diversify portfolio: Investments in government securities would help in portfolio diversification and consequently reduce risk for retail investors.
Zero charges under Retail Direct Scheme: Retail Direct Account is completely free of charge and does not involve any intermediary. It would reduce overall transaction charges for individual investors in terms of the charges which they are otherwise required to pay for investing through aggregators or taking indirect exposure through mutual funds.