10 Things To Know About 7.75% Savings Bonds:
7.75% Savings (Taxable) Bond 2018 scheme launched pic.twitter.com/zLCzgbxf8K— Ministry of Finance (@FinMinIndia) January 4, 2018
1) The 7.75% Savings Bonds have a maturity of seven years.
2) There is no maximum limit for investment in these bonds. The bonds will be issued for a minimum amount of Rs.1,000 (face value) and in multiples thereof.
3) The 7.75% Government Savings Bonds are open to investment by individuals (including Joint Holdings) and Hindu Undivided Families. NRIs are not eligible for making investments in these bonds.
4) The 7.75% Savings Bonds offer cumulative and non-cumulative modes for payment of interest.
5) In the cumulative option, interest is paid on maturity of bonds. The cumulative value of the Rs1,000 investment in the bond, which has a face value of 1,000, will be Rs 1,703 at the end of seven years.
7) Financial advisors say that despite a cut in the interest rate offered by the bond, it is still a good option for investors looking at a regular income from their investments. The interest rate on small savings schemes, barring Senior Citizen Savings Scheme, has been reduced for the March quarter.
8) The interest income earned from 7.75% Government Savings Bonds, like bank fixed deposits, will be added to one's income and taxed according to the respective slabs.
9) The bonds will be exempt from wealth tax under the Wealth Tax Act, 1957.
10) The bonds are not transferable and not tradeable in the secondary market either. They are also not eligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions.