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Govt of India announces new Savings Bonds

By Chennabasaveshwar

The Government of India on Thursday announced to launch 7.75 percent savings bonds to enable resident citizens and Hindu Undivided Families (HUF) to invest in a taxable bond, without any monetary ceiling. NRIs are however not eligible for making investments in these Bonds.

Govt of India announces new Savings Bonds

These Bonds are open to investment by individuals (including Joint Holdings) and Hindu Undivided Families (HUFs).

Bonds will be issued at par i.e. at Rs.100.00. Bonds will be issued for a minimum amount of Rs.1,000/- (face value) and in multiples thereof. Accordingly, issue price will be Rs.1,000/- for every Rs.1,000/- (Nominal). Bonds will be issued in demat form (Bond Ledger Account) only.

The Bonds will have a maturity of seven years carrying interest at 7.75 per cent per annum payable half-yearly. The cumulative value of Rs. 1,000/- at the end of seven years will be Rs. 1,703/-

Subhash Chandra Garg, Secretary, Department of Economic Affairs, tweeted, " 7.75 per cent Savings Bonds Scheme notified would replace 8 per cent scheme. This will be effective from 10th January. This sequenced notifications and gap of a week were necessary to avoid overlap in cheques realisations."

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