Govt. Of India issues Floating rate savings bonds with current interest rate as 7.15%. This can be a good investment option for individual investors looking for principal protection and higher interest rate. Here is a thread on the key features. (1/6) #RBIbonds #Investments

-The bonds are issued by Government of India, which makes the product risk free.
-Resident Indians and HUFs are allowed to invest in these bonds. NRIs are not eligible. (2/6)

-Minimum investment as Rs. 1000. There is no upper ceiling on the maximum amount.
-Fixed Tenor of 7 Years. However, premature withdrawals are allowed for senior citizens subject to minimum lock in period. Penalty of 50% of last coupon payment (3/6)

-Floating interest rate reset and paid every 6 months. Currently the rate is 7.15%. No cumulative option is available.
-Floating interest rate linked to National Savings Certificate rate with a spread of 0.35% (4/6)

-The bonds do not carry any tax benefit. The interest income is fully taxable at individual slab rate. Tax will be deducted at source while interest is paid.
-These bonds are not tradable in secondary market. These bonds are also not eligible as collateral for loans (5/6)

Who should invest?
-Investors looking for safety and higher interest rate than fixed deposits
-Senior Citizens who have surplus money beyond their liquidity needs and looking for higher interest rates and periodic income can invest in these bonds. (6/6)