Hold-to-maturity investors may choose G-Secs with matching horizon

Those who may need liquidity before end of tenor should avoid them

Yields of central and state government bonds have risen, widening the gap with fixed deposits (FDs) of large banks. The 10-year government security (G-Sec) yield is at 6.60 per cent, while state development loans of the same tenor are at 7.09 per cent. In comparison, State Bank of India is offering 6.05 per cent and HDFC Bank 6.15 per cent on FDs of five to 10 years.

 

Right time to enter? 

Experts see this as a favourable entry point. “This presents a timely opportunity for retail investors to secure sovereign-backed returns that exceed those of comparable FDs,” says Saurav Ghosh,