RBI Bonds 2022 Complete details

In this article you will know complete details for:

RBI floating rate savings bonds,
Interest rate of RBI Bonds 2022,
From where you can buy RBI bonds,
Taxation of RBI Bonds,
Fixed Deposit vs Bonds

About RBI Floating Rate Savings Bond

The RBI Floating Rate Savings Bonds are issued by the Indian Government.

To borrow money from the public, governments issue floating rate bonds. The interest rates for floating bonds are reset periodically.

What is the RBI floating rate bond interest rate 2022

At present, the RBI floating rate bond interest rate is 7.15 percent. The interest rates on these bonds are reset every six months.

Interest is payable semi-annually from the date of bond issuance until the 30th June / 31st December, on the 1st July and 1st January, respectively.

From where to buy RBI Bonds 2022

You can buy rbi bonds from designated branches of SBI, Nationalised Banks, 4 Private Sector Banks (HDFC, ICICI, IDBI, Axis) and Stock Holding Corporation of India Ltd.

Taxation

These bonds are taxable under the Income-tax Act of 1961. And, TDS is deducted on the interest.

Features of the RBI Savings Bond

a) Residents and Hindu Undivided Families (HUFs) can purchase these bonds.

b) The minimum investment is Rs 1,000, with no maximum amount.

c) The bonds have a 7 year lock-in. Individual investors aged 60 and above can make premature withdrawals, subject to a minimum lock-in time based on their age.

d) These bonds pay interest half-yearly. Every year, on January 1 and July 1, the interest is paid out in half.

e) The bonds are not transferable. Transferability is limited to nominee(s)/legal heir in case of death of the holder.

f) The bonds are not tradable in the secondary market and also not eligible as collateral for availing loans.

g) Nomination facility is available

RBI Bonds vs Fixed Deposit : Which is better?

In today’s scenario of falling interest rates of Fixed Deposits offered by Banks, RBI Bonds are a better option.

It is one of the best deals for investors, who are looking to invest a lump sum and earn 7.15% returns i.e. 1-2% higher than FD.

These bonds are completely safe and have zero credit risk, as these are issued by RBI.

Best suited for Senior Citizens:

1) Lock-in period for investors of 60 to 70 years shall be 6 years from the date of issue.

2) Lock-in period for investors of 70 to 80 years shall be 5 years from the date of issue.

3) Lock in period for investors of the age of 80 years and above shall be 4 years from the date of issue

CONCLUSION

Today, fixed deposits provide a poor rate of interest regardless of whether you are a senior citizen or not. Whereas the RBI Bonds specifically provide benefits to senior citizens. Therefore, if you are planning to open an FD account, you should rather invest in RBI bonds.

RBI Bonds 2022 Complete details