Fixed Income instrument issued by Company, Financial Institution or the Government. These instruments offer regular / fixed payment of Interest (coupons) over a longer period of time.
Bonds issued by Financial Institutions offer attractive returns compared to the Fixed Deposit by the Banks. Bonds are issued as a Secured or Un-Secured instruments. The Coupons (interest rate) payments have different frequency to suit the needs of the investor.
- Issued by RBI with a Interest rate of 7.15% (NSC rate + 0.35%), the interest rate will be reset every six months.
- The Interest earned are fully taxable.
- Sovereign Guaranteed
- Bond tenor is 7 years
Gold has always been equated to power from the ancient days of our civilization. Human mind places high value on Gold equating it to Social Elatedness and store house of economic value.
Gold has always been the “must have” Investment at times of Uncertainties, say War like situation or an Economic Crisis or a Pandemic Like Covid-19.Gold can be owned in vary many forms from Coins, Ingots (gold bars) and Gold ornaments.
Reserve Bank of India has launched “Sovereign Gold Bonds” to encourage public consumption of Gold in Digital form with an aim to decrease the import of Physical Gold.
- An Individual can invest Maximum 4 kgs. in a Financial Year
- Investment Tenor is 8 years with exit option from 5th year on the interest payment dates.
- The investors will be offered a fixed rate of 2.50 percent (taxable) per annum payable semi-annually on the purchase value of these bonds.
- The Bonds are Tradable on BSE and NSE from the date to be notified by RBI which provides liquidly to the investors.
- The value of this investment will track the price movement of gold and shall be redeemed in Indian Rupees based on simple average of closing price of gold of 999 purity, of previous 3 working days published by IBJA Ltd.
- Bonds can be used as collateral for loans.
- No Capital Gain tax on Redemption. The capital gains arising out of premature sale in the exchanges, will be taxed as per Debt Taxation.
These are popularly called as 54 EC bonds. These are the tax savings bonds under Sec 54EC, where an Investor get Capital gain from selling a long Term asset.
An Individual is eligible to invest a maximum of 50Lakhs in a financial year to Save Tax on the gains arising on sale of Long Term Capital Asset.
Bonds are issued by
- National Highway Authority
- Rural Electrification Corporation
- Power Finance Corporation
- Indian Railways Finance Corporation
Face Value : Rs.10000 per Bond
Minimum Application amount : Rs.10,000
Maximum Application amount : Rs.50,00,000
Maturity : 5 years
Interest rate : 5%
Interest rate payable Annually during April.