posted on 06-06-2019

Gilts

Updated October 1, 2019

What are Gilts?

Gilts are bonds issued by the British government. India's government bonds are also called gilts.

How Do Gilts Work?

Gilts get their nickname from the gilded edges that the security's certificates used to have.

In Britain, gilts are issued in 100-pound units and represent a loan to the government. The bonds promise income over a fixed term, and the government repays the principal at maturity. Investors can buy gilts from the British government by going to the government's Debt Management Office or via a brokerage service. Investors can also buy gilts at the post office.

Why Do Gilts Matter?

Gilts are the British equivalent of U.S. Treasury securities. Like Treasurys, some are indexed to inflation. Large financial institutions are the largest purchasers.