What are the Government Securities

Government is one of the biggest borrowers from capital and money market. We have already taken a look at money market securities offered by Government as also the schemes run by it through post office.  Government Securities is the generic term applied to different kinds of debentures and bonds offered by Government (state orcentre) and quasi-governmental agencies.

The maturities of Government securities range between 1-20 years and return on the securities range between 5 to 7 per cent.  Rates have significantly come down from high yields of 14 per cent.  Most of Government Securities are bought by the banks, provident fund trusts, financial institutions and insurance companies.