Bonds for Sub-Brokers

Why choose this product?

• Minimum investment of Rs.1,000
• No maximum limit on investment
• Floating rate of interest with a Half Yearly interest payout
• 100% risk free investment option
• 7 years tenure of the bond from the date of issue with a special provision for premature redemption for Senior Citizens.

Who can invest in it?

• An Individual, not being a Non-Resident Indian
• A Hindu Undivided Family

Eligibility ?

You can apply for the Floating Rate Savings Bonds 2020 (Taxable) if you are:

• 1. A person residing in India
  2. In his or her individual capacity, or
  3. In individual capacity on joint basis, or
  4. In individual capacity on anyone or survivor basis, or
  5. On behalf of a minor as father/mother/legal guardian
• A Hindu Undivided Family

FAQs

Are the Floating Rate Savings Bonds (Taxable) transferable?
No, these bonds are not transferable.

What are the minimum and maximum limit for investment in the Floating Rate Savings Bonds (Taxable)?
The Bonds will be issued for a minimum amount of Rs. 1000/- (face value) and in multiples thereof. There will be no maximum limit for investment in Bonds.

What is the tenure of the Floating Rate Savings Bonds (Taxable)?
The tenure of the bond is 7 years from the date of issue. No interest will accrue after the maturity of the bond. The bonds shall be repayable on the expiration of seven years from the date of issue. Premature redemption shall be allowed for specified categories of senior citizens. This is similar to the earlier withdrawn 7.75% RBI Taxable Bonds.

Is a nomination facility available?
Yes, a nomination facility is available.

How much tax do I have to pay?
The interest income from the bonds is taxable. TDS (This stands for Tax Deducted at Source, which means the tax you have to pay on your salary is already deducted and the net amount is received by you.) is deducted at the time of interest payment as per the prevailing IT rules.

What are the minimum and maximum limit for investment in the Floating Rate Savings Bonds (Taxable)?
The Bonds will be issued for a minimum amount of Rs. 1000/- (face value) and in multiples thereof..

What is the tenure of the Floating Rate Savings Bonds (Taxable)?
The tenure of the bond is 7 years from the date of issue. No interest will accrue after the maturity of the bond. Premature redemption facility is allowed for investors in the age group of 60 years and above as per RBI’s Notification.

When is the interest payable?
Interest is payable semi-annually from the date of issue of bonds, up to 30th June / 31st December as the case may be, and thereafter half-yearly for the period ending 30th June and 31st December on 1st July and 1st January respectively.

Are the Floating Rate Savings Bonds (Taxable) transferable?
No, these bonds are not transferable.

How much interest will the Floating Rate Savings Bonds (Taxable) bear?
The interest rate of the bond would be re-set half-yearly starting with Jan 1st, 2021, and thereafter every July 1st and will be liked with the prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate. Accordingly, the coupon rate for the first coupon period i.e. July 1 to Dec. 31, 2020, payable on Jan. 01, 2021 arrives at 7.15% (6.80%+0.35%). All subsequent coupon reset would be based on the fixation of rate of interest on NSC on Jan 01 and July 011 following the above methodology.

How much is the interest and how will be payable?
The interest on the bonds is payable half-yearly on 1st January and 1st July every year. On 1st January 2021, interest shall be payable at 7.15%. The interest rate for the next half-year (which is due on July 1, 2021) will reset every six months, the first reset being on January 1, 2021. There is no option to pay interest on a cumulative basis. This would mean that once the interest on bonds is due, it will be credited to the inve ..