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Zerodha offers govt bonds, securities

Aims to lure fixed-income investors away from fixed deposits & debt mutual funds.

, ET Bureau|
Oct 17, 2018, 09.58 AM IST
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Zerodha has emerged as the second largest trading platform in terms of the number of active users competing with the likes of ICICI Securities and HDFC Securities.
BENGALURU: In a first of its kind initiative, digital stock broking platform Zerodha has started offering government bonds and securities through its platform, mainly aimed at luring fixed-income investors away from fixed deposits and debt mutual funds.

“There is Rs 110 lakh crore sitting in bank fixed deposits and more than Rs 10 lakh crore sitting in debt mutual funds but government securities as investment destination offer better returns and not many people know about it,” said Nithin Kamath, CEO, Zerodha. “We are starting to offer these products and test the appetite in the market.” Zerodha also offers direct mutual funds through Coin. Now, it intends to add more offerings for its users in forms of longterm and short-term investment instruments like government bonds and corporate bonds.

Zerodha has emerged as the second largest trading platform in terms of the number of active users competing with the likes of ICICI Securities and HDFC Securities. “Banks are supposed to be selling these products but they directly compete with fixed deposits and others, hence banks are not proactive in selling these products. Recently, exchanges were also allowed to sell these products and that is how Zerodha has come in,” said Kamath. “Problem is, not a lot of people even know of these investment opportunities.”

Explaining the process, Kamath said that potential investors can bid for treasury bills on Tuesdays and government bonds on Thursdays. While the securities will get allocated to their de-mat accounts, the interest payments will go directly to their connected bank accounts. Securities take four to five days to get allocated.

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