As the name suggests, these are the bonds issued by the Reserve Bank of India. And, the rates are floating, which means the rates keep on changing.
This bond scheme is directly linked with the Post Office’s National Saving Certificate. This means, whatever is the interest rate of the Post Office’s National Saving Certificate, these bonds give 0.35% higher interest than that. The interest is paid semi-annually i.e, in every 6 months on 1st of January and 1st of July
Under this, both individuals and HUF can invest.
RBI Bonds have a tenure of 7 years. The minimum amount of investment is Rs1000 whereas there is no maximum limit. The interest rate is usually higher than fixed deposits.
The scheme has a lock-in period of 7 years. But, if your age is between 60-70 yrs, then the lock-in period is 6 years. If your age is 70-80 yrs, then the lock-in period will be 5 yrs. And, if your age is 80+ yrs then the lock-in period will be 4 yrs.
Premature withdrawal, i.e, withdrawal before 7 yrs of lock-in period, is not allowed. However, there is an exception. Only Senior Citizens are allowed premature withdrawal only on such conditions which are acceptable.
You can buy RBI bonds from any nationalized bank like SBI, HDFC, ICICI, IDBI, Axis etc
As the bonds are issued directly by the Reserve Bank of India, they are completely safe to invest.
If you are someone looking for better and fixed returns, then you can opt for these Bonds. They are considered as one of the safest debt products offering highest interest.
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