If there is one instrument that most people agree brings stability to a financial plan, it is the government bond. These securities are issued by the sovereign and carry the lowest credit risk you can find. You lend money to the government, and in return you get interest at fixed intervals plus your principal when the bond matures. The formula has not changed for decades, and that is why they are often treated as the bedrock of fixed income investing.

For households in India, the attraction is simple. The promise of repayment is almost absolute. That peace of mind is worth trading a few percentage points of extra yield that riskier products may offer. People do not buy these bonds expecting to get rich quickly. They buy them because they want certainty — cash flows that arrive on time, without unpleasant surprises.

Getting access is no longer the hassle it once was. In the past, investors had to go through banks or intermediaries. Now, RBI Retail Direct and stock exchange platforms let anyone with a demat and trading account participate. You can log in, scroll through the list of bonds, check the coupon, yield, maturity, and make a decision in minutes. This digital shift has opened up what was once an insider’s market to ordinary savers.

The real choice is not whether to buy but which maturity to select. A short-dated bond works for near-term expenses. A ten-year paper works if the goal is retirement. The mistake investors often make is buying without linking the maturity to their own needs. That is what forces a sale in the middle, and that is where market risk shows up. Because if interest rates rise, the price of your bond falls. If you hold till maturity, you don’t feel that pain. If you sell midway, you might.

Taxes are another piece of the puzzle. The interest is taxable as per your slab. If you sell before maturity, capital gains tax applies. Nothing complicated, but it is worth noting at the start so that returns are not overstated.

What matters more than these mechanics is the role these bonds play in the bigger picture. They are not there to give you the highest return. They are there to give you a stable floor on which the rest of your portfolio can be built. Equities, corporate bonds, or alternatives can then be layered on top. The safety of the government bond allows the rest of the plan to take measured risks.

That is why, even in 2025, they remain relevant. For some, they are the core holding. For others, they are the anchor that allows riskier bets elsewhere. Either way, the outcome is the same — a portfolio that does not lose balance when the market mood shifts. And in the end, that is the real reason people continue to invest in government bonds: not for excitement, but for peace of mind.