RBI Bonds FAQs
Below are the FAQs you must go through to know about general questions on RBI Bonds.
What is RBI Bond?
Reserve Bank of India issues floating interest, taxable bonds on behalf of Govt. of India to provide financing for various long term projects with a fixed term maturity.
What is the current interest rate on RBI Bonds?
The current interest rate on the RBI floating rate bond is 7.35 percent (7.00% +0.35%).
What is Frequency of interest rate review of RBI Bonds?
Every six months, the interest rates on RBI bonds are reset/previewed.
When the interest is payable on RBI Bonds?
The interest on the bonds will be payable at half yearly intervals on Jan 1st and July 1st every year.
How the interest rate in Floating rate RBI bonds get decided?
The interest rate will be linked with the prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate.
Is there any Cumulative Interest rate option available?
There is no option to pay interest on a cumulative basis.
Who can Invest in RBI Bonds?
Individual, HUF, Charitable Institutions / Universities.
Is joint holding allowed in RBI Bonds?
Yes, Investors can invest in Joint Holding format.
Can Minor Invest in RBI Bonds?
Yes, Minors can Invest in RBI Bonds along with Natural / Legal Guardian.
From Where can I Purchase RBI Bonds?
| RBI Retail Direct Online Portal. |
| State Bank of India. |
| Bank of Baroda. |
| Bank of India. |
| Bank of Maharashtra. |
| Canara Bank. |
| Central Bank of India. |
| Indian Bank. |
| Indian Overseas Bank. |
| Punjab National Bank. |
| Punjab & Sind Bank. |
| Union Bank of India. |
| UCO Bank. |
| HDFC Bank Ltd. |
| ICICI Bank Ltd. |
| IDBI Bank Ltd. |
| Axis Bank Ltd. |
| Stock Holding Corporation of India Limited. |
What is the issue price of an RBI bond?
Bonds will be issued at par price of Rs 1000/- and in multiples there-of.
What is the Maturity period of RBI Bonds?
RBI Bonds are issued for 7 yrs.
What is the limit of investment in RBI Bonds?
There is no limit of investment in RBI Bonds.
What is the Tax applicable on interest of RBI bonds?
Interest on the Bonds will be taxable under the Income-tax Act, 1961 as applicable according to the relevant tax status of the bond holder.
Is there any Wealth tax applicable on return of RBI Bonds?
The RBI Bonds are exempt from Wealth-tax under the Wealth- tax Act, 1957.
Can RBI Bond holders transfer bonds from one name to another name?
The RBI Bonds are not transferable from one name to another name.
Can we purchase / sell RBI Bonds on the Secondary Market?
RBI Bonds are not tradeable on Secondary Market.
Can RBI Bond holders take a loan by pledging RBI Bonds?
RBI Bonds are not eligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions.
Is Nomination allowed in RBI Bonds?
Yes, Individual Bond holders can make Nomination.
Who can consider investing in RBI Bonds?
Investors, those who aim for regular and stable returns without exposing themselves to substantial risks.
Is there any default Risk in RBI Bonds?
RBI bonds are issued by the RBI and are backed by the Government of India. Therefore, the investment in these bonds is completely risk-free.
Is there any Lock-In for investments in RBI Bonds?
| RBI bonds can be redeemed only after the maturity of 7 year tenure. |
| However there are some relaxation for investors aged above 60 yrs. |
| The Lock-in period for investors in the age bracket of 60 to 70 years shall be 6 years from the date of issue. |
| The Lock-in period for investors in the age bracket of 70 to 80 years shall be 5 years from the date of issue. |
| The Lock-in period for investors in the age of 80 years and above shall be 4 years from the date of issue. |
Is premature Withdrawal allowed for Joint Holding?
In case of joint holders or more than two holders of bonds, any one of the holders can fulfill the eligibility criteria to make withdrawals before maturity.
Is there any penalty on premature withdrawal?
There is a penalty for premature withdrawal in RBI Savings Bonds to the tune of 50% of interest due and payable for the last six months of the holding period.
In what form RBI Bonds are issued?
The Bonds will be issued only in the electronic form and held at the credit of the holder in an account called Bond Ledger Account (BLA), opened with the Receiving Office.