Investing in government securities has become significantly more accessible via the Reserve Bank of India's (RBI) retail direct platform, specially for non-resident Indians (NRIs). This platform offers several advantages, including the absence of brokerage fees, commissions, annual maintenance fees, or account opening charges. NRIs can open an RBI retail direct account to invest in government securities (G-Secs), state development loans (SDLs), and treasury bills (T-bills). However, NRIs will not be able to invest in sovereign gold bonds (SGBs) and floating rate bonds through this avenue.
NRIs and Overseas Citizens of India (OCIs) are allowed to invest in instruments such as G-Secs, SDLs, and T-bills directly in the primary market through the RBI retail direct platform. They can also buy and sell these instruments in the secondary markets via an RBI retail direct account. The Fully Accessible Route (FAR) regulations impose no limits on investments by Non-Resident Indian retail investors. NRIs can invest in Government Securities both on repatriable and non-repatriable bases, depending on the terms and conditions of the investment scheme. There are no inherent restrictions on NRIs regarding investment in Government securities.
To open an RBI retail direct account, NRIs must have an Indian mobile number (linked with Aadhaar if not on the central KYC registry), an NRO (non-resident ordinary) savings bank account with UPI/net banking facility, PAN, a cancelled cheque of the NRO bank account, and a scanned copy of their signature. An NRO bank account is specifically designed for NRIs to manage incomes earned in India, allowing them to conduct various transactions within the country.
Here's how to open an RBI retail direct account
- Visit the RBI retail direct website and provide necessary details such as account type, full name, email ID, mobile number, PAN, date of birth, and login name.
- Verify the provided details by generating and entering the OTP sent to the registered mobile number.
- Review all entered information on the new web page and click on "Submit" if accurate.
- Receive the application number for the account opening process and initiate the KYC process.
- Proceed with the CKYC option if applicable, or opt for the offline KYC process if necessary.
- Provide Aadhaar details and consent to use Aadhaar data for KYC purposes.
- Upload the offline Aadhaar KYC file obtained from the UIDAI portal and verify the details captured by the RBI.
- Fill in additional personal details, tax residency details, and consent to comply with regulatory guidelines.
- Upload a scanned copy of the signature on a white paper and select the bank account from the list of approved banks.
- Provide details of the nominee and proceed with the video KYC process.
- Complete the video KYC process with an RBI authorized agent, after which the retail direct account will be enabled, and login credentials will be emailed.
- Once the account is activated, investors can log in using the provided credentials and subsequently change their password.
FAQs
Yes, as per RBI norms, NRIs can invest in the Indian Bond Market. However, please note that not all Bonds are eligible for investment by NRIs.
Can NRI invest in RBI? ›
NRIs can invest in RBI bonds, making it a viable and attractive option for those looking to secure their funds while supporting India's growth. These bonds offer a range of benefits, including safety, attractive interest rates, and potential tax advantages.
Can NRI open rdg account? ›
Accessibility: The platform is accessible to all retail investors, including non-resident Indians (NRIs). Convenience: Investors can open a 'Retail Direct Gilt (RDG)' account online through the RBI Retail Direct portal.
How can I invest in government securities in India? ›
Stock Exchanges: Government bonds are listed on stock exchanges like NSE and BSE. Investors can place buy orders through their trading accounts with registered brokers. Electronic Trading Platforms: Some banks and financial institutions offer online platforms where you can buy government bonds in the secondary market.
What is the investment limit for NRI in India? ›
The individual limit for NRI under PIS is five per cent of the paid up capital/paid up value of each series of convertible debentures of an Indian company and aggregate limit for all NRIs taken together is one per cent of the paid up capital/paid up value of the company.
Can OCI buy bonds in India? ›
Non-Resident Indians (NRIs) and Overseas Citizens of India (OCI) are both eligible to subscribe to government bonds in the form of new or re-issuance when the securities are issued.
What is the best investment for NRI in India? ›
OCI and NRI Investment Options With Low-Risk In India
- Guaranteed** Return Savings Insurance Plans. ...
- Child Plans. ...
- Corporate Fixed Deposits (FDs) or Non-Convertible Debentures (NCDs) ...
- Public Provident Fund (PPF) ...
- Money market instruments. ...
- Perpetual Bonds. ...
- PSU (Public Sector Undertaking) Bonds. ...
- Sovereign Gold Bonds (SGBs)
NRIs can maintain their PPF accounts until maturity under non-repatriation terms, allowing continued contributions without the option to repatriate funds or convert them into foreign currency. Interest accrues as per prevailing rates, ensuring the account remains active.
What is the foreign investment limit for RBI? ›
Within that limit, each asset management company can invest up to $1 billion in foreign securities. This limit had been raised from $600 billion in 2021, although the overall industry limit of $7 billion remains unchanged since 2008.
What is the interest rate of RBI bonds? ›
RBI Floating Rate Savings Bonds offer 8.05% interest now: Eligibility, tax, other features. If you are a conservative investor and want more than 8% return from your investment, you can check RBI Floating Rate Savings Bonds (FRSBs).
STEPS TO APPLY ONLINE
- Login to ICICIdirect.com.
- Visit Govt. Securities section under FD/Bonds & choose RBI's Floating Rate Savings Bond.
- Fill investment details and complete payment.
RBI's Retail Direct scheme, launched in November 2021, allows individual investors to invest directly in G-Secs. To use this option, register for the Retail Direct Gilt (RDG) account with the RBI. This gilt securities account will allow you to participate in the primary issuance of many kinds of G-Secs.
What is the minimum investment in government securities? ›
The minimum investment amount for government bonds is typically Rs. 1,000 or multiples thereof. Government bonds are issued in denominations of Rs. 1,000, and there is no maximum limit for investment.
Are government securities taxable in India? ›
Taxation on Government Securities
Interest income from Government Securities is taxable based on the holder's income tax bracket under the Income Tax Act. Gains from the sale of bonds are taxed as either long-term capital gains or short-term capital gains, depending on how long the bonds were held.
What is the investment limit in government securities? ›
Minimum investment in the Bonds shall be one gram with a maximum limit of subscription per fiscal year of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the Government from time to time, provided that (a) in case of joint holding, the above limits shall ...
Can US NRI invest in PMS in India? ›
Can NRIs invest in the PMS? Yes, NRIs can invest in the PMS through the NRE or NRO accounts. There are some additional compliance/documentation requirements for NRI clients. Our relationship manager will help the NRI client with this documentation.
Can NRIs invest in infrastructure bonds in India? ›
NRIs can invest in multiple fixed income instruments including Fixed Deposits (FDs), Government Securities (G-Secs), Public Sector Undertaking (PSU) and infrastructure bonds, corporate bonds and Non-Convertible Debentures (NCDs).
Can NRI buy SGB in Zerodha? ›
Corporate, Partnership, Limited Liability Partnership (LLP) and Non-Resident Indians (NRIs) account holders cannot buy SGBs in the primary market.
Can an NRI invest in index funds in India? ›
As an NRI, you can invest in index, gold or debt ETFs such as Nifty 50, NIFTY Bank or Sensex. However, you are not allowed to invest in currency and commodity based ETFs in India.
