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RBI Floating Rate Bonds

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  • RBI Floating Rate Bonds

What is RBI Floating Rate Bonds 2020?

The Government of India Savings Bonds (popularly known as the RBI Bonds) are the safest investment in India, best for risk averse investors
  • Investors get interest @ 7.15% for April-September 2021 period while most FD rates in large banks are in the 4-6% range.
  • These Bonds have a tenor of 7 years and the interest earned is fully taxable. Interest is paid on 1st Jan and 1st July each year.
  • Deposit does not qualify for deduction under Section 80-C
  • Interest is subject to TDS in case interest is more than Rs. 10,000/-. Submission of Form 15 G/15 H not accepted. Require Exemption Certificate from ITax Deptt. For non deduction of TDS.
  • The interest rate is reset every 6 months. It is linked to the prevailing rate on National Savings Certificates (NSCs), with the Savings Bonds paying out 0.35% more than the NSC rate.
  • The term of NSCs is 5 years compared to 7 years on the Savings Bonds.
  • Interest on NSCs is also eligible for tax deduction up to ₹1.5 lakh per annum while no such tax advantage is enjoyed by the RBI Bonds.
  • No maximum limit for investment, minimum amount is ₹1,000.
  • Senior citizens are allowed premature exit as follows:
  • Aged 80 and above: —— after 4 years
  • Aged between 70 – 80 years:—– after 5 years
  • Aged between 60 – 70 years:  —– after 6 years
  • However in case of premature exit, half of the interest due for the 6 months immediately preceding the exit is deducted.
  • On maturity amount gets credited to investors Bank Account without surrendering the Bond Certificate.
  • Bonds are not tradable in the secondary market and also not eligible as collateral for availing loans.

The Sovereign backing and high interest rate makes these bonds extremely attractive for fixed income investors. However the long tenor compromises on liquidity. It is suggested that Debt Mutual Funds be preferred by those who have a need for liquidity.

What is RBI Floating Rate Bonds 2020?

The Government of India Savings Bonds (popularly known as the RBI Bonds) are the safest investment in India, best for risk averse investors

  • Investors get interest @ 7.15% for April-September 2021 period while most FD rates in large banks are in the 4-6% range. 
  • Investors get interest @ 7.15% for April-September 2021 period while most FD rates in large banks are in the 4-6% range. 
  • Deposit does not qualify for deduction under Section 80-C
  • Interest is subject to TDS in case interest is more than          Rs. 10,000/-. Submission of Form 15 G/15 H not accepted. Require Exemption Certificate from ITax Deptt. For non deduction of TDS.
  • The interest rate is reset every 6 months. It is linked to the prevailing rate on National Savings Certificates (NSCs), with the Savings Bonds paying out 0.35% more than the NSC rate.
  • The term of NSCs is 5 years compared to 7 years on the Savings Bonds.
  • Interest on NSCs is also eligible for tax deduction up to ₹1.5 lakh per annum while no such tax advantage is enjoyed by the RBI Bonds.
  • No maximum limit for investment,  minimum amount is ₹1,000.

Benefits of RBI Floating Rate Bonds

High Interest Rates

RBI Floating Rate Bonds give a high interest rate where you earn more than other products.

Floating Interest Rates

It insures that you receive interest based on market or interest rates offered on NSC.

Risk Free Investment

These bonds are risk free as they are offered to investors directly from the government.

Fixed Income Source

The investors receive a periodic and regular income in the form of interest payouts.

Recession Safety

When bonds have a portion of your portfolio, they help smooth out the bumps during recession.

Peace Of Mind

When you have the exact prediction of future income, you posses a greater peace of mind.

Why Through Us?

Accessibility

With our 24x7 digital access, you get complete support with reliability in all your investments.

Transparency

Our process of advisory and investments contain great level of transparency and safety.

Professional Guidance

Our expert team guide your through all the process of your investment in a professional way.

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