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What are Government Securities?

For a video walkthrough on government securities, see What are Government bonds and how to invest in them?

In order to meet its fiscal expenditure, the government has to borrow money. The RBI issues T-bills and Bonds on behalf of the Govt to raise money by offering a fixed return on investment. Very similar to how banks give interest on fixed deposits and use that money to lend to others, the government use it to run our country.

G-Secs is a collective term for these two type of securities: maturities less than 1 year are called T-bills and those more than one year are called bonds.

Make sure to read this chapter on Varsity which explains about G-secs in detail.