MoneyTree

After discontinuing its 7.75% fixed interest rate bonds on the 28th May 2020, the RBI has come out with its new “floating rate savings bonds” on 26th June 2020, which were available from 1st July 2020.

Let’s Understand its Features:

Launch Date – 01-07-2020

Who can Apply – Indian Residential Individual & HUF

Issue Price – Rs. 1000 per Bond

Minimum Investment – Rs. 1000 and multiple of Rs.1000

Maximum Investment – There is no maximum limit for Investment in this Bond

Interest Rate – Floating

Interest Payout Option – Semi annually on 1^st January and 1^st July every year (Cumulative option not available)

Tenure – 7 years from date of issue

Nomination Facility – Available for Individual Applicant (not for Minor applicant)

Taxability and TDS – Interest is fully taxable & TDS is applicable on interest paid

Transfer – Transfer of this bond is not allowed unless the death of applicant

Premature Redemption - Premature Redemption is not allowed except –

*Note - The redemption payment will only be made on the next due date for payment of interest, i.e. 1st January or 1st July after application for such redemption is received. While paying such maturity proceeds, 50% of the interest due for the last half year shall be deducted as penalty for premature redemption.