RBI Sovereign Bonds

There is no limit of investment. The bonds are taxable and Non-Resident Indians are not allowed to invest. The bonds are not transferable in the secondary market and have a maturity period of 7 years.  When an investor chooses a half yearly interest option the interest is paid on 1st February and 1st August every year. If a cumulative option is selected, the accumulated interest along with the principal is paid on the maturity date.

Sample of a RBI sovereign Bond

 

Issuer Fixed interest rate Maturity date Early payment date(if any) Interest dates Unit size of each bond
Government of India- Taxable bonds Sovereign rated 7.75% 7 Years After 4 yrs/ 5/6 yrs.based on ages-80,70,60 years of the investor Half yearly for non-cumulative. On maturity for cumulative option Rs.1000 and in multiples of Rs.1000