Skip to main content

8% Government of India Bonds quick guide


For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability.


What are Government of India bonds
Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form only and are not listed or tradable on stock exchanges. The minimum investment amount is Rs 1,000 (face value of one bond) and there is no maximum limit of investment. The interest received from these bonds is taxable, at the marginal rate of income tax you are liable to pay. Tax is deducted at source if your total interest exceeds Rs 10,000.


What's good with Government of India Bonds...
In the current market environment, interest rates in the economy are expected to head lower. The benchmark repo rate has been lowered from a peak of 8% in 2014 to 6.25% now. This has meant that small savings rates and fixed deposit rates have also fallen. This bond at 8% now boasts a rate of interest higher than the SBI 5-year fixed deposit, the post office monthly income scheme, the National Savings Certificate and the Kisan Vikas Patra. Being issued by the Reserve Bank of India means associated security and safety. The rate fixed by the government has not been changed so far and buying this bond now means locking in income for 6 years at a relatively higher rate.


...What's not good with Government of India Bonds
Since the bonds are not listed, there is no secondary market exit. While you can apply for the bond with a joint holder, you cannot transfer it. You can pledge the bond to raise a loan but that facility is limited to loans from scheduled commercial banks. All the documentation for the bond, nomination, any pledge or transfer at death of the holder is to be done in physical form and there is no online facility available at present. You can, however, apply online through an online portal- icicidirect.com (which acts as a distributor for ICICI Bank for this bond)-if you are a registered user.


This is a good option for savers you seek safety over returns.



------------------------------------
Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 4 Tax Saver Mutual Funds for 2017 - 2018

Best 4 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. BNP Paribas Long Term Equity Fund



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact SaveTaxGetRich on 94 8300 8300

------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300

------------------------------------


 

Popular posts from this blog

How to gauge the risk profile of your mutual fund portfolio?

MUTUAL funds are considered to be an investment option for those who do not generally devote a lot of time to monitoring and managing their portfolios. Investors experience both good as well as tough times as far as mutual fund investments are concerned. But while evaluating the portfolio of their equity mutual fund holdings there are a few points that one should check to know about the level of risk that they are facing. Often there are situations where there is a higher risk than what was estimated initially. Here are a few ways to evaluate various risk levels. Individual holding exposure : The portfolio of the equity fund where one has invested or plans to invest needs to be scrutinised to see whether the risk levels are such that could lead to a larger volatility in the holdings. Depending upon this factor and the risk taking ability of the investor the choice about a particular fund as an investment should be made. One key point to watch out is whether there is a large ex...
Read more

Stick to Good Fund Manager who Can Multiply Your Investment

A manager may be the difference between the best and worst funds. Here's how you can find the right one    Does a mutual fund manager make a difference to your investment? The answer may not be as easy as you think, since most best-performing mutual funds have moved away from individualistic fund management to process-driven methods, limiting the scope of an individual's role in investment decisions. In fact, many fund managers would speak at length about how the "system" their fund house has in place makes their task of picking stocks easy even though it restricts their freedom. Still, the question is important, especially after recent reports that the Securities and Exchange Board of India ( Sebi ) may ask fund managers to disclose to investors their track record of managing money. Let us take a look at the universe of large-cap funds over the past five years. According to Value Research, an independent mutual fund tracking firm, the topper in the category is DSP...
Read more

Tata Fixed Income Portfolio Fund dividend

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)       Tata Mutual Fund has announced dividend under the dividend option of Tata Fixed Income Portfolio Scheme B2 Plan A-DQ, Tata Fixed Income Portfolio Scheme B2 Reg-DQ and Tata Fixed Income Portfolio Scheme B2 Direct-DQ. The record date has been fixed as August 29, 2013. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C. Invest Tax Saving Mutual Funds Onlin...
Read more

NRIs and direct taxes code (DTC)

DTC Proposes To Do Away With Special Provision That Allows NRIs Liberalised Duration Of Stay In Country      THE new direct taxes code could bring a large number of global Indians under the tax net, as it does away with a provision that allowed individuals to escape tax in any country citing double tax avoidance.    The new legislation, introduced in Parliament on Monday, says an individual shall be a resident of India in any financial year if he is in the country for more than 59 days in that year, and has been has been India for more 365 days in four preceding financial years. A number of Indian industrialists including Vedanta's Anil Agarwal and Essar's Ravi Ruia have acquired non-resident status over the years.    The DTC has only attempted to clean up the provision in line with the laws globally. A phrase "being outside India" in the existing income tax law exempted individuals who stay outside the country for six months from paying taxes. This was prone ...
Read more

Personal Loan for Rs. 10,000 Income

  A low salaried person having a family to support is always struggling to generate sufficient money for emergencies, day to day expenses etc. Moreover if the individual is the only earning member, the need of money is always a highest priority because considering the inflation, expenses are always higher compared to savings. So in case of emergencies, personal loan is the top most choice for such individuals which they can make use of according to their requirement apart from asking their friends/family members. However there is a minimum income limit in order to get personal loan from credit lenders. We will consider an example of individual's having minimum net income of Rs. 10,000. Although there are few limited banks offering personal loan   to low income individual's, listed below are the banks in India offering personal loan to individual's with a monthly income of Rs. 10,000.: Bank of Baroda Punjab National Bank (Semi-Urban/Rural Centers) Abhyudaya Co-operative Ban...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now