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As equity markets face consistent declines and a global tariff war intensifies, retail investors are increasingly turning to government securities, seeking safer investment avenues. | Photo Credit:
The consistent fall in equity markets and the raging global tariff war are driving retail investors to sovereign-guaranteed government securities.
Small investors have stepped up account openings on RBI’s Retail Direct portal, with the number of accounts opened jumping about 91 per cent year-on-year (yoy) in FY25 as they seek higher returns by diversifying their investments.
The number of retail investor accounts opened on the platform rose to 2,28,497 as on March, 2025 against 1,19,669 logged in the same period in 2024.
Investors can subscribe to Central Government Securities, State Government Securities, Treasury Bills, Sovereign Gold Bonds, and Floating Rate Savings Bonds on the portal. RBI has also launched a mobile app to facilitate retail investors’ investment these securities.
Subscriptions to the aforementioned financial instruments via the portal rose about 91 per cent YoY to touch ₹6,323 crore last fiscal, against ₹4,223 crore recorded in FY’24.
Investors can also trade in Central Government Securities, State Government Securities, Treasury Bills, and Sovereign Gold Bonds.
The total traded volume in the aforementioned financial instruments soared 192 per cent YoY to ₹1,882 crore from ₹643 crore.
Trivesh D, COO, Tradejini said the Indian government is gradually increasing its dependence on household savings to handle its rising debt, with around $346 billion in sovereign bonds due over the next five years.
The government strategy to reduce dependence on foreign capital and stabilize public finances by tapping into trusted instruments such as G-Secs and small savings schemes comes with its own risks, he added.
Over-dependence on domestic savings could restrict funds flow to private sector investments, possibly slowing long-term economic growth, he said.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said GSecs have been attracting increasing investments from investors given the current market volatility, and this trend of preference for G Secs is likely to gather momentum.
FIIs have also been increasing their investments in G Secs even when they were relentlessly selling in the equity market, he added.
Ankur Punj, MD & National Sales Head, Equirus Wealth said the RBI support for these instruments, coupled with the growing appeal of low-risk, high-liquidity assets, makes G-Secs an increasingly attractive option.
G-Secs remain an attractive option for investors amid ongoing market uncertainty, with expectations of further yield softening and strong demand. As fiscal discipline continues and the RBI’s support remains steady, G-Secs are well-positioned to deliver stable returns in the coming year, he added.
Over the course of FY25, the 10-year yield dropped by about 50 basis points, marking its largest decline in five years. The yield of the 10-year benchmark government securities is anticipated to further soften by 25 to 30 basis points, reaching 6.25 per cent to 6.30 per cent in FY26, on the back of expected policy repo rate cuts and strong demand for bonds.
Published on April 5, 2025
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