RBI Bond Floating Rate Savings Bonds, 2020 (Taxable)

RBI launches floating rate saving bonds, 2020(Taxable) scheme for the investors. The government has announced 7.15 percent interest rate and it will be reset by every six month. It is the replacement of earlier withdrawn 7.75 percent RBI Taxable Bonds. The investment period will start from July 1, 2020.

Wide features of the Bonds are mentioned below:-

1. Criteria for the Investment: -Individual or joint holders and Hindu Undivided families are eligible to invest. However, NRIs cannot invest in these Bonds.
2. Form submitting address and Procedures: – Investor can submit applications for the Bond in the designated Branches of SBI, Nationalized banks, IDBI Bank Limited, Axis Bank Limited, HDFC Bank Limited. One can apply in the form of cash (up to Rs. 20,000)/drafts, cheques or any electronic mode acceptable to the receiving office. The bond will be issued in electronic form which will be held in Bond ledger Account (BLA) as allocated by Receiving offices. There is no maximum limit for the investment. The investor can start minimum of Rs. 1000 and in multiples of Rs.1000 thereof.
3. The tenure of the Bonds: -The bonds shall be repayable on the expiration of seven years from the date of issue. While, senior citizens can take the advantage of premature redemption.
4. Time Period for the Bond: -The Bonds will be on tap till further notice and issued in non-cumulative form only.
5. Norms for Interest rate: – The interest rate will be availed half yearly on 1^st Jan 2021 and 1^st July 2021 every year. The coupon on 1st January 2021 shall be paid at 7.15%. The Interest rate for next half-year will be reset every six months, the first reset being on January 01, 2021. There is no option to pay interest on cumulative basis.
6. Tax procedures on Interest amount: – The interest as received by holders will be taxable according to the income tax slab as applicable to the income.
7. Bond’s Transfer Eligibility: – The bond will be only transfer to a nominee(s)/legal heir in case of death of the holder of the bond.
8. Tradability/Advances: – The investor cannot trade in the secondary market and cannot treat or use it as collateral for loans from banks, Financial Institutions and Non-Banking Financial Company (NBFC) etc.
9. Nomination: – An individual bond holder will be eligible to make a nomination.

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