G-secs, T-bills much better than bank FD, suggests Zerodha's Nithin Kamath
Both T-bills and G-secs tradeable instrument issued by the Central Government or the State Governments.
Amid the speculations that the Reserve Bank may hike the repo rate in coming months to match global recession measures, Zerodha's co-founder Nithin Kamath on 7 November suggested the people to invest in government securities (G-Sec) and Treasury Bill (T-bill), as they would give much better interest rates.
Also, Kamath shared the interest rates of T-Bills against FD rates of popular banks, including SBI, PNB, HDFC, ICICI, Axis and IDFC.
As per the chart shared by Nithin Kamath, T-bills are giving maximum interest rates than banks on FD accounts. For 91 days, the T-bills interest rate is 6.47 per cent, for 182 days its 6.8 per cent, and for 364 days its 6.95 per cent. If compared to banks' FD rates, no bank is giving more than 6 per cent interest.
Both T-bills and G-secs tradeable instrument issued by the Central Government or the State Governments. G-Secs can be sold easily in the secondary market to meet cash requirements or used as collateral to borrow funds in the repo market.
While, T-bills are short-term debt instrument and the maturity period is less than a year and is very well secured. It has no risks as investment in Treasury bills assures the complete security of the funds.
CSGL, or popularly known as Constituents' Subsidiary General Ledger account, means an Subsidiary General Ledger (SGL) account opened and maintained with RBI by an agent on behalf of the constituents of such agent, i.e. a second SGL account opened by an agent with the RBI to hold the securities on behalf of their constituents.
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