Investors come in various shades. Some prefer high-risk-high-reward investments, while others are more comfortable investing in low-risk, fixed-income investment options. For the latter category of investors, there are many types of government securities in India that may be ideal investment choices. They bear exceptionally low risk, and in addition to this, they also come with the advantage of guaranteed income or returns on investment. For risk-averse investors who seek low-risk investment products, there are different types of government securities available in the Indian financial markets.

What are government securities?

Government securities or G-Secs are essentially debt instruments issued by a government. These securities can be issued by both the central government and the state governments of India. When you invest in such options, you generally gain a regular interest income. Since these investment products are backed by the government, the risk associated with them is almost negligent.

What are the different types of government securities available?

If you’re interested in investing in such low-risk products, there are many types of government securities in India for you to choose from. They can broadly be classified into four categories, namely Treasury Bills (T-bills), Cash Management Bills (CMBs), dated G-Secs, and State Development Loans (SDLs).

Types of Government Securities

Treasury bills (T-bills)

Treasury bills or T-bills are issued only by the central government of India. They are short-term money market instruments, which means that their maturity period is less than 1 year. Treasury bills are currently issued with three different maturity periods: 91 days, 182 days, and 364 days. T-bills are quite unlike other kinds of investment products available in the financial markets.

Most financial instruments pay you interest on your investment. The Treasury bill, on the other hand, is what is commonly known as zero-coupon securities. These securities do not pay you any interest on your investment. However, they’re issued at a discount and are redeemed at face value on the date of maturity. For instance, a 182-day T-bill with a face value of Rs. 100 may be issued at Rs. 96, with a discount of Rs. 4, and redeemed at the face value of Rs. 100.

Cash Management Bills (CMBs)

Cash Management Bills (CMBs) are relatively new to the Indian financial market. They were only introduced in the year 2010 by the government of India and the Reserve Bank of India. CMBs are also zero-coupon securities and are very similar to Treasury bills. However, the maturity period is the one major point of difference between the two types of government securities. Cash Management Bills (CMBs) are issued for maturity periods less than 91 days, making them an ultra-short-term investment option. CMBs are strategically used by the government of India to meet any temporary cash flow requirements. From the investor’s point of view, Cash Management Bills can be used to meet short-term goals.

Dated G-Secs

Dated G-Secs are also among the different types of government securities in India. Unlike T-bills and CMBs, G-Secs are long-term money market instruments that offer a wide range of tenures, starting from 5 years and going all the way up to 40 years. These instruments come with either a fixed or a floating interest rate, also known as the coupon rate. The coupon rate is applied on the face value of your investment and is paid to you on a half-yearly basis as interest.

There are around 9 different types of dated G-Secs currently issued by the government of India. These are listed below.

State Development Loans (SDLs)

As the name implies, SDLs are issued only by the state governments of India to fund their activities and to satisfy their budgetary needs. These types of government securities are very similar to dated G-Secs. They support the same repayment methods and come with a wide range of investment tenures. The only difference between dated G-Secs and SDLs is that the former is issued only by the central government, while the latter is issued solely by the state governments of India.


Given that there are many different types of government securities in India, it’s easy to choose the best alternative for your portfolio. Since the investment tenure is one of the main points of difference between these G-Secs, you can choose the product that aligns best with your investment timeline. In addition to offering you guaranteed income or returns, investing in government securities also helps you balance the risk factor in your investment portfolio.