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Difference between 'Held to Maturity', 'Available for Sale' & 'Held for Trading' securities

A Financial Institution's entire investment portfolio is generally classified under three categories —
 (1) 'Held to Maturity', (2) 'Available for Sale' and (3) 'Held for Trading'.

However, in the balance sheet, the investments are disclosed in six classifications: i) Government securities, ii) Other approved securities, iii) Shares, iv) Debentures & Bonds, v) Subsidiaries / joint ventures and vi) Others (CP, Mutual Fund Units, etc.).


The securities acquired by a Financial Institution with the intention to hold them till maturity will be classified under Held to Maturity.

The securities acquired by the FIs with the intention to trade by taking advantage of the short-term price / interest rate movements etc. will be classified under Held for Trading.

The securities, which do not fall within the above two categories, will be classified under Available for Sale.

Ref: RBI

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