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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.

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. 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.

We are pleased to launch the online facility for you to invest in ‘54EC Capital Gain Tax Exemption Bonds’. These Bonds are issued by Public Sector Undertakings (PSUs) and rated ‘AAA’ by CRISIL, ICRA & CARE denoting highest degree of safety.

 

Salient features of Capital Gain Bonds

Lock-in Period
5 Years from the deemed date of allotment
​Tax Benefit
Exemption U/S 54EC of the Income Tax Act, 1961​

 

​Rate of Interest
5.00% p.a. payable annually
Taxation
Interest is taxable although no TDS is deducted

 

​Mode of Holding
Demat as well as Physical
Investment Limit
Min. 2 Bonds (Rs. 20,000) & Max. 500 Bonds (Rs. 50 Lacs) in a FY

 

 

Details of the Ongoing Bonds for Online Investment

Company Name

Coupon (Taxable)

Coupon Payment Date

Action

Download Form

Rural Electrification Corporation (REC)

5.00% p.a.

June 30th every year

Invest Online

Download Form

Indian Railways Finance Corporation (IRFC)

5.00% p.a.

October 15th every year

Invest Online

Download Form

Power Finance Corporation Limited (PFC)

5.00% p.a.

July 31st every year

Invest Online

Download Form

National Highways Authority of India(NHAI)

5.00% p.a.

April 01st every year

NA

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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.

 

Key Features Of SGBs:

 


2.50% p.a. Assured returns on Initial Investment​

₹ 50 discount per gram on investment price​

Zero Holding Cost
 
 

Capital appreciation opportunity as price is linked to Gold

No Capital Gain Tax if Held till Maturity
(* For Individuals only)​

No TDS on Interest​
 
 

Can be used as Collateral for Loan​

Tenor – 8 years. Exit Option after 5th year.​

Minimum – 1 gm & Maximum – 4 kgs^^ per Financial Year​

 

 

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.

 

Floating Rate Savings Bonds, 2020 (Taxable):

Please find below the product details of Floating Rate Savings Bonds, 2020 (Taxable):
The Government of India launched the Floating Rate Savings Bonds, 2020 (Taxable) scheme on July 01, 2020 to enable Resident Indians/HUF to invest in a taxable bond, without any monetary ceiling. The bonds are so called as they carry floating interest rate option. The rates will be linked with prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate.

 

Details of the Ongoing Bonds for Online Investment

Bond Name

Interest rate (%)*

Bond Details

Download Form

Floating Rate Savings Bonds,
2020 (Taxable)

7.15% (The coupon/interest of the bond
would be reset half yearly starting with Jan 1st, 2021
and thereafter every July 1st and Jan 1st.)

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

 

Benefits of Floating Rate Savings Bonds, 2020 (Taxable):

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:
Floating Rate Savings 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 Floating Rate Savings bonds is taxable, it are exempt from Wealth Tax Act, 1957.