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What are Bonds?

Bonds are fixed-income investments through which an entity or the Government raises funds. Bonds can be issued by companies or Government organizations against which they offer a rate of interest. They are one of the most reliable investment instruments that can provide stability to your portfolio.

When you invest in bonds, there’s a fixed date on which you will get the principal amount repaid along with interest. However, note that unlike stocks, bonds don’t give you ownership rights to a company.

 

How to Invest in Bonds with us?

SBICAP Securities Ltd., makes it easy and hassle-free to invest in bonds. To invest in bonds, download the application form, and submit it to the nearest SBICAP Securities branch. To apply for bonds online, log in to our website and invest.​

 

Types of Bond offerings:


Capital Gain Bond
A capital gain bond is one of the best ways to save long-term capital gains tax arising out of sale of assets. It has a tenure of 5 years, and is redeemed automatically at the end of that period.

Sovereign Gold Bond
Sovereign Gold Bonds (SGBs) are government securities that are denominated in grams of gold. A substitute, for physical gold, they are issued by the Reserve Bank of India (RBI) on behalf of Government of India. A joint holding is allowed in SGBs. If you are resident of India, you are eligible to invest in SGB.​

Government of India Bond
Government of India (GOI) Bonds are safe and attractive investment options which you can buy to gain assured returns. Major issuers of GOI Bonds include commercial banks and primary dealers (PDs).​

 

Capital Gain Bonds

Capital gain bonds are one of the prudent ways to save long-term capital gain tax arising out of sale or transfer of long-term capital assets such as land, building or both.

The capital gains thus realized are invested within six months of the date of transfer across eligible bonds.  To invest in bonds, contact your nearest SBICAP Securities Ltd. branch, to gain further clarity on this.​

Available Capital Gain Bonds:

Company Name

Interest rate (%)*

Bond Details

List of Bank Branch

Rural Electrification Corporation Limited (REC)

5.00%

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National Highway Authority of India (NHAI)

5.00%

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Power Finance Corporation Limited (PFC)

5.00%

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Indian Railways Finance Corporation Limited(IRFC)

5.00%

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Benefits of Capital Gain Bonds:


Safe & Secure
Capital Gain Bonds are pretty safe as they are AAA-rated and issued by reputed and established PSUs.​

Save Tax
Capital Gain Bonds also help you save taxes. You can invest the capital gains in these bonds to save taxes and use the remaining amount for earning better returns.​

Earn interest
These bonds offer an attractive rate of interest, thus enhancing your gains.

 

Sovereign Gold Bond

The Government of India, in consultation with the RBI, issues Sovereign Gold Bonds (SGB), thereby offering investors another way to own gold. SGB offers you a superior alternative to holding physical gold.​

 

Benefits of Sovereign Gold Bonds:


Safety
Since they are issued by the Government in consultation with the RBI, SGBs are highly safe.​​

Lower cost and reduced risk
Sovereign Gold Bonds can be held in dematerialized form and hence, entail no storage cost. Since they are held in dematerialized form, they are less prone to theft and misuse.​

Higher returns
With Sovereign Gold Bonds, you enjoy the opportunity of capital appreciation. These bonds also earn an annual interest on the invested amount that helps you make your gains.

 

Government of India Bonds

GOI bonds are tax-savings bonds issued by the Government of India in accordance with the RBI. GOI bonds are safe and offer an attractive investment option. The Government will pay you a fixed rate of interest if you invest in GOI bonds. The face value on these bonds are paid on the date of maturity.​

Available GOI Bond:

Bond Name

Interest rate (%)*

Bond Details

Download Form

7.75% Savings (Taxable) Bonds, 2018

7.75%

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Note: To invest in bonds, contact your nearest SBICAP Securities Branch for further clarification and submission of forms.​

Benefits of GOI Bond:


Risk-free
As they are issued by the Government and regulated by the RBI, they are pretty risk-free as against market-linked products.

 


Attractive returns
GOI Bonds are known to offer attractive returns over the long term. When you remain invested, you can expect better returns on your investment.​​

Tax benefits
Even though the interest earned from GOI bonds is taxable, it are exempt from Wealth Tax Act, 1957.​​