You can invest in bonds directly, or go the mutual fund way. Investing directly means buying when RBI issues them. You can do this by getting in touch with your bank or third party sellers like SBI DFHI ltd. Banks will help you open a GILT account with the RBI, which is a special Demat that a bank opens for you.

You can visit the bank branch and fill-in the form or else transact online through portals such as IDBI Samridhi Gsec Portal or brokers’ portals who help you invest through their portals, when bonds are issued.

The second way to invest in these bonds in buying them from the stock exchange-they will be deposited in your Demat account directly. You can do this online, place your order on phone, or may have to visit your broker, depending on the kind of facility your broker gives you.

The third way is to invest through mutual funds. Funds that invest in government bonds are called debt funds. The only problem going the fund way is the portion of your investment not invested in bonds, as you want, but in other avenues, such as gold, or equity or retained as liquid cash. Avoid such funds that have higher proportion invested in avenues other than bonds-your product of core interest.