Indian Government announces new ‘Savings Bonds’
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The Indian Government has made an official announcement about introducing a 7.75 percent savings bonds to allow resident citizens and Hindu Undivided Families (HUF). This will allow them to invest in taxable bonds, without any monetary ceiling. However, NRI’s are not eligible for making any such investments in these bonds. These bonds have provision to open individually (including Joint Holdings) and Hindu Undivided Families (HUF’s) for investment.
The bonds will be issued at par i.e. at Rs.100. They will be issued for a minimum amount of Rs.1, 000/- (face value) and in multiples thereof. In accordance to this, the issue price will be Rs.1, 000/- for every Rs.1, 000/-(Nominal). These bonds will be issued only in demat form (Bond Ledger Account) only.
The maturity period for bonds is seven years carrying an interest of 7.75 percent per annum payable every six Months. The cumulative value of Rs.1, 000/- at the end of seven years will be Rs.1, 703/-
The Department of Economic Affairs, Secretary Subhash Chandra Garg, tweeted, “7.75 percent Savings Bonds Scheme notified would replace, 8 percent scheme. This will come into effect from January 10th. This sequenced notifications and gap of a week were necessary to avoid any overlap in cheques realizations, the secretary was quoted as saying.
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