RBI bonds with attractive rates of 7.75%- Should you invest?

RBI bonds giving 7.75% interest rates is the talk of the town these days and everyone has up the ante to know more about this investment. Therefore, in this article, we will cover everything you want to know about these bonds.

Why Interest rates of 7.75% is looking attractive?

When the economy is struggling, RBI keeps on reducing the Repo rates, and in the same line, banks keep on reducing the interest on fixed deposits to give cheap loans in the market. The rate reduction continues until the economy comes in the growth phase. In this process, the investors who are looking for a fixed income from FD keeps on getting lower interest rates and their overall returns get the beating. Currently, our economy is in the struggling phase.

To put our point in perspective, in the last 1-2 years, State bank of India’s FD rates has come down to less than 6% which were previously around 7-8%.

So, these RBI bonds look attractive than FD in this scenario.

Who can invest?

Any individual/ HUF can invest in these bonds. However, NRIs are not allowed.

Maturity and Rate of Interest?

The rate of interest as already discussed will be 7.75% and maturity 7 years. The interest will be paid half-yearly. However, as these are not traded in stock exchanges, so maturing before 7 years is a difficult task.

Tax treatment?

The interest earned from the investment will be added to your income and will be taxed as per the income tax slab.

How to purchase?

These can be purchased from any Public sector banks or private banks such as HDFC, ICICI, and Axis. Just call to your bank and apply if interested.

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