· Bonds issued by RBI · Can be hold singly, jointly · The bonds are issued in the form of stock certificate or may be held at the credit of the holder in an account called Bond Ledger Account (BLA) · The investment can be made in multiple of Rs 1000 without any ceiling. subscription to the bonds will be in the form of cash or drafts or cheque drawn in favour of the bank · Interest is 8%, payable half yearly on 1st February and 1st August. The interest for the initial and last period will be for a broken period · Investor can also opt for cumulative interest, which renders the maturity value at Rs 1601 on a face value of Rs 1000 · An investor to surrender the bonds at any time after 6th half year but redemption will be on the following interest payment due date · Effective date of premature encashment for non-cumulative bonds will be 1st July and 1st January every year and for the cumulative bonds, the notional half-yearly interest payment due date · Partial encashment is not allowed · TDS is applicable @10% if the interest paid or payable (on cumulative bonds) is Rs 10000 and above in a financial year · Bonds cannot be gifted or transferred · Bonds are not tradable in secondary markets and are not eligible as collateral for loans from banks, financial institutions or non banking financial companies, etc · Nomination facility available · Issuer is Government of India · Interest can paid half yearly or cumulative as per the choice of the investor. Option can not be changed after subscription · Available at RBI (Ahamedabad, Bangalore, Bhubaneswar, Mumbai, Kolkata, Guwahati, Hyderabad, Jaipur, Kanpur, Chennai, Nagpur, New Delhi, Patna, Thiruvananthapuram), Public Sector Banks. · Application for the bonds may be made in Form A stating the amount, full name and address of the applicant · No interest is paid after the maturity of the bonds
· Safety : Very safe investment, as issuer if govt. · Liquidity: Not liquid as the bonds can not be gifted or transferred and loan can not be obtained against the bonds. · Capital Appreciation: No capital appreation · Returns : Returns by way of halfyearly interest, compounded. · Tax benefits : Taxable
- Applications for bonds can be made in Form A, stating clearly the amount and full name and address of the applicant
- Application should be accompanied by necessary payment in the form of cash/draft/cheque
- Complaints can be made in the respective Regional Offices of RBI or commercial bank where account is maintained
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