Zerodha G-Sec Settlement

Money debited greater than allotment (G-Sec)

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If more money is debited than your G-Sec allotment, the cause is accrued interest.

Mechanism

G-Secs trade at “dirty price” (clean price + accrued interest since last coupon).

Settlement debit = (Allotted face value x dirty price / 100) + minor adjustments.

So:

  • You receive face value worth of bonds.
  • You pay face value + accrued interest.

You’re not losing money; the accrued interest is recovered at the next coupon payment.

Example

  • Allotted: Rs 1,00,000 face value of 7% G-Sec.
  • Last coupon: 3 months ago.
  • Accrued interest: 7% / 2 / 2 = 1.75% on Rs 1,00,000 = Rs 1,750.
  • Debit: Rs 1,00,000 (face) + Rs 1,750 (accrued) = Rs 1,01,750.

At next coupon date, you receive full half-year coupon (Rs 3,500), of which Rs 1,750 was already paid as accrued interest.

Reconciliation

Check Console > Reports > Bond holdings for accrued vs face value breakdown.

See also

External references

References

  1. Zerodha, G-Sec accrued interest mechanism, support.zerodha.com.
  2. RBI, G-Sec settlement convention, rbi.org.in.

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