The Reserve Bank of India on 26th June 2020 has announced the launching of Floating Rate Savings Bonds, 2020 (Taxable) scheme commencing from 1st July 2020 to enable person resident in India/HUF to invest in a taxable bond, without any monetary ceiling.
Key Highlights of the bond:
- The Bonds are open to investment by individuals (including Joint Holdings) and Hindu Undivided Families. NRIs are not eligible for making investments in these Bonds.
- Subscription to the bonds will be in the form of cash (upto ₹20,000/- only)/drafts/cheques or any electronic mode acceptable to the Receiving Office and There will be no maximum limit for investment in the Bonds.
- The interest on the bonds is payable semi-annually on 1st January and 1st July every year. The coupon on 1st January 2021 shall be paid at 7.15%. The Interest rate for next half-year will be reset every six months, the first reset being on January 01, 2021.
- The Bonds shall not be tradable in the secondary market and shall not be eligible as collateral for loans from banks, Financial Institutions and Non-Banking Financial Company (NBFC) etc.
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