InvestorQ : Are the government securities and the Gilt edged securities one and the same?
Angel dcosta made post

Are the government securities and the Gilt edged securities one and the same?

Answer
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Dhwani Mehta answered.
1 year ago


Do you know why they are called gilt edged securities? In the old days, when government money was backed by gold, the US Fed used to issue government debt that had an edge coating of real gold as a basic embedded value in the bonds. That practise has stopped with the collapse of the Bretton Woods system but the name has remained. The term government securities encompass all Bonds & T-bills issued by the Central Government, state government. These securities are normally referred to, as "gilt-edged" as repayments of principal as well as interest are totally secured by sovereign guarantee.

’Gilt Securities’ are issued by the RBI, the central bank, on behalf of the Government of India. Being sovereign paper, gilt securities carry absolutely no risk of default.