Central Government Bonds

The central government of India requires money to execute the planned expenditure program. The central government appoints the Reserve Bank of India as its merchant banker to raise the resources in a cost-effective manner as per the budgetary approval of the government. These bonds carry a sovereign guarantee similar to that found on the currency note which says “I promise to pay the bearer…” and is signed by the Governor of Reserve bank of India. The minimum amount of investment is Rs.10,000  and any individual can invest through his/her existing demat account.

Sample of a Central Government Bond

Issuer Fixed interest rate Maturity date Early payment date (if any) Interest dates Unit size of each bond
Government of India Sovereign rated 10.25% 30-May-2021 Secondary sale 30-May & 30-Nov Rs.100