RBI Retail Direct Explained: Buying G-Secs, T-Bills and Savings Bonds Without an Intermediary

For most Indian households, exposure to government borrowing happens indirectly — through a bank deposit, a debt fund, or an insurance product. Since November 2021 there has been a direct route as well. The RBI's Retail Direct Scheme allows an individual to open a gilt account with the central bank itself and buy government paper in primary auctions and in the secondary market. This article explains the mechanics, the limits, the costs and the things worth comparing before deciding whether the route suits you at all.

What the scheme is

The Retail Direct Scheme is described by the RBI as a one-stop solution to facilitate investment in Government Securities by individual investors. Under the scheme, individual retail investors can open a Gilt Securities Account — the "Retail Direct Gilt" or RDG account — with the RBI, and use it to buy and sell government securities through an online portal. The scheme was launched by the Prime Minister on 12 November 2021.

The portal is not a broker platform. Securities bought through it are held in a government securities account with the RBI itself, rather than in a demat account with a depository participant. The RBI has since broadened the plumbing around it: various new features, in terms of product as well as payment options, have been introduced, including the launch of a mobile app in May 2024.

What you can buy, and the minimum ticket

The product set covers Central Government paper, state paper and gold bonds. As the RBI notes, retail investors can invest in Central Government Securities, Treasury Bills, State Government Securities and Sovereign Gold Bonds through the Retail Direct Portal. Subscription to Floating Rate Savings Bonds, 2020 (Taxable) was later enabled as well.

The ₹10,000 floor is a meaningful detail. It puts direct government paper within reach of a far wider set of savers than the wholesale market, where lot sizes are institutional.

How buying actually happens

There are two ways to buy. The first is by placing a bid in the primary auctions of dated G-Secs, T-Bills and SDLs, in the non-competitive segment only — that is, by entering only the desired amount of securities, without entering a price. The second is by placing a buy quote in the secondary market portal. For Sovereign Gold Bonds, a bid can be placed during the subscription windows announced by the RBI on its website.

Non-competitive bidding is the retail-friendly design. You are not competing on yield with primary dealers and banks; you state a quantity and are allotted at the auction's weighted average outcome. There is a ceiling on how much of an issue can go this way: for T-Bills, the aggregate allocation of all non-competitive bids will be restricted to a maximum of 5% of the aggregate nominal amount of the issue within the notified amount as specified by the Government of India, or any other percentage determined by RBI.

Auction calendars are published in advance — quarterly indicative calendars for Treasury Bills and State Development Loans, and half-yearly calendars for Government of India dated securities. In August 2025, the RBI said that to enable investors to systematically plan their investments, an auto-bidding facility for Treasury bills, covering both investment and re-investment options, has been enabled in Retail Direct, letting investors mandate automatic placement of bids in primary auctions of T-bills.

Understanding a T-bill: no coupon, only a discount

Treasury bills behave differently from a bank fixed deposit, and the difference confuses first-time buyers. The RBI explains that T-bills are money market instruments, short-term debt instruments issued by the Government of India, presently issued in three tenors — 91 day, 182 day and 364 day. They are zero coupon securities and pay no interest. Instead, they are issued at a discount and redeemed at the face value at maturity.

The RBI's own illustration: a 91 day Treasury bill of ₹100 face value may be issued at, say, ₹98.20 — a discount of ₹1.80 — and would be redeemed at the face value of ₹100. Your return is the gap between the purchase price and the redemption value. There is no quarterly interest credit, no cumulative option, and no renewal unless you place a fresh bid or use the auto-bidding mandate.

Dated G-Secs are the opposite case: they carry a stated coupon, usually paid half-yearly, and can run for many years. If you sell one before maturity in the secondary market, the price you receive depends on prevailing yields — which is where interest rate risk enters the picture, even though credit risk on sovereign paper is a different conversation entirely.

Floating Rate Savings Bonds through the same portal

FRSB 2020 (T) sits apart from tradable gilts. The RBI describes them as interest bearing, non-tradeable bonds, issued by the Government of India, which are repayable on the expiration of seven years from the date of issue.

The coupon is not fixed. Under the operational guidelines, the interest rate on the bond is linked to the prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate, and the interest rate is reset every six months, on 1st of January and 1st of July. Interest is payable at half-yearly intervals on 1 January and 1 July every year, and there is no option to pay interest on a cumulative basis.

For the current half-year, the RBI announced that the coupon rate on FRSB 2020 (T) for the period July 01, 2026, to December 31, 2026, and payable on January 01, 2027, remains at 8.05% (7.70%+0.35%), unchanged from the previous half-year. That figure will change whenever the NSC rate changes at a subsequent reset.

On tax, the position is unambiguous: interest on the Bonds will be taxable under the Income-tax Act, 1961 as amended from time to time and as applicable according to the relevant tax status of the Bonds holder. By contrast, on Sovereign Gold Bonds the RBI's FAQ states that TDS is not applicable on the bond, while noting that it remains the bond holder's responsibility to comply with tax laws. Treating all "government" products as taxed alike is a common error.

Account mechanics, costs and housekeeping

Eligibility is straightforward. Retail investors — individuals, that is, natural persons — may open an RDG account, and they need a rupee savings bank account maintained in India, a Permanent Account Number (PAN) issued by the Income Tax Department, any Officially Valid Document for KYC purposes, a valid email ID and a registered mobile number. Non-resident retail investors eligible to invest in Government Securities under FEMA, 1999 are eligible under the scheme.

A few operational points that regularly trip people up:

• •Nomination is not optional. It is mandatory for the investor to fill in the nomination details at the time of opening of the account, and up to two nominees can be entered. Nominee details can be changed later through the portal.
• •Bank account linking. The savings bank account is linked to the Retail Direct account by crediting a token amount and verifying it.
• •Charges. No fee is charged for opening and maintaining the Retail Direct Gilt account with the RBI, and no fee is charged by the aggregator for submitting bids in primary auctions. Payment gateway fees, as applicable, are borne by the registered investor.
• •Grievances. Any query or grievance related to the scheme can be raised on the portal, and is handled or resolved by the Public Debt Office (PDO), Mumbai, RBI.

What to compare before using the route

Rather than asking whether this is "better" than a deposit or a fund, compare the characteristics you will actually live with. Liquidity: a bank deposit can usually be broken, while a gilt must be sold in the secondary market at whatever price is available — RBI has put in place a market making arrangement under which primary dealers may respond to buy or sell requests from RDG account holders with a market-relevant quote, but a quote is not a guarantee of your preferred price. Cash flow shape: a T-bill pays nothing until maturity, a dated G-Sec pays half-yearly coupons, FRSB pays half-yearly but resets. Tax: interest is taxed in your hands at your slab unless a specific exemption applies, and capital gains on sale of tradable securities are a separate computation. Administration: coupons and redemptions land in your linked bank account, and must be tracked for your return filing, since no fund house is doing the bookkeeping for you.

E-Square Tip: If you are exploring Retail Direct, start by reading the auction calendar on the RBI website rather than the product list — the calendar tells you when a T-bill or dated security is actually on offer, and the non-competitive window is time-bound. Also check your linked bank account details and nomination entries once a year; coupon and redemption proceeds are credited automatically, and a stale account number is the most common reason a government payment fails to reach the investor.