Government Securities Investor should always be daring enough to risk his investments to earn higher profits. But some investors will be risk averse but a still desire earns returns for their investments. One such option which promises assured returns to the investor with minimal risk are government securities. Government securities are usually traded in primary and secondary markets.
Though the profits earned by investing in government securities are very low they are in high demand by all kinds of financial institutions due to their clean history and high liquidity. Any individual or organization is who are sacred to face risk can invest in government securities and be assured of returns.
An individual is free to directly purchase securities from the government organization who issues them. How Many Types of Government Securities are Available in the Market? Different types of government securities available in the market to meet the tailored needs of the investors.
Different types of government securities include Zero coupon Bonds Zero coupon bonds are long term investment which offer return only on the time of maturity. They offer high security to the investments so they became widely popular in recent years.
Treasury Bills Treasury Bills are quite similar to zero coupon bonds but the main difference is only is the term period of investment. It is very short when compared with term period of Zero coupon bonds. Treasury Note These are another type of government securities that have a term period of 10 years. The returns in the investment are paid every six months.
In some countries Treasury note as preferred financial instrument to measure the economy of the country. Treasury Bond The maturity period of these securities is 10 years and above. The returns are paid semi annually and are preferred financial instruments by the by pension funds or insurance companies. Benefits of Investing in Government Securities
Though government securities offer very low interest rate when compared to other investment in the stock market they are highly secured and gives an investor promised return there by keeping the investor stress free from the market trends. As a word of note always consult a good broker to make a choice in the list of government securities available.