RBI bonds- The safest investment in 2024?

With markets fluctuating like never before, retail investors are faced with a serious challenge of choosing a safe and stable return yielding scheme to plant-in their hard-earned money. Thus, an investor is tasked with carefully identifying a viable option from the existing low-risk investment plans in India to counter the inevitable risks that exist in the investment domain. However, when it comes to safety and stability, there is an option that stands out from the rest.

Backed by the government, RBI bonds offer both stability and safety to investors. Also known as Savings bonds, these are primarily aimed at retail investors who are in search of a secure investment option with fixed returns. In this article, we will touch up on the various types of RBI bonds, their features and everything you need to know before investing in one.

Types of RBI bonds:

RBI bonds are broadly classified into 5 types:

1. Capital Gain Bonds: If you’re an investor who has earned long term capital gains from the sale of assets such as real estate or stocks, this bond is for you.
2. The 7.75% Bond: The 7.75% Savings Bonds are a type of fixed-income instrument issued by the Government of India that offers a fixed interest rate of 7.75% per annum, hence the name.
3. RBI Infrastructure Bonds: These bonds are issued with the specific purpose of financing infrastructure projects in India.
4. RBI Retail Direct Bonds: RBI Retail Direct is a platform that allows retail investors to directly invest in government securities, including bonds, treasury bills, and other government debt instruments.
5. Sovereign Gold Bonds: These are government securities that act as a substitute for holding physical gold.
6. RBI Floating Rate Savings Bonds: These bonds come with a floating interest rate linked to the NSC rate that resets every six months.

Why should you choose an RBI bond?

Apart from being a safe financial instrument, an RBI bond investment holds several other ‘cherries’ on the top that make it more attractive. Here are some key aspects that make it a better investment option:

1. Safe and sound: RBI bonds are issued and guaranteed by the Reserve Bank of India, making them a safe investment option for investors.
2. Interesting interests: These bonds offer a fixed interest rate over the tenure of the bond, aiding in a stable and predictable return for your valuable investments.
3. Flexible tenures: RBI bonds come with different tenure options, ranging from a few years to longer durations.
4. Unaffected by markets: While RBI bonds generally come with a fixed tenure, they may also hold the feature of premature withdrawal under certain circumstances.
5. Liquidity: RBI bonds are not subject to market fluctuations as they are issued and backed by the central bank.

Eligibility for RBI bonds:

RBI Bonds are open to investment to almost all individuals residing in India. With investments starting from as low as ₹1000, these are also accessible to the wide diversity that the country upholds. However, in most cases, NRIs are not eligible to make investments in these bonds.

Conclusion:

If stability and security are your top priorities in scaling an investment horizon in India, RBI bonds come out as the most practical option for you. Highly liquid, flexible and with fixed interest rates, RBI funds act as a safe financial instrument in the era of risk dwelling investments. If you are looking for safe and risk-free investments, head over to Tapinvest and choose from a variety of curated plans that offer stable and swift returns. Explore now!

FAQs On RBI Bonds Investment:

1. What is the tenure of an RBI bond?

The tenure of RBI bonds varies depending on the type of bond. It can range from a few years to over a decade. For example, Sovereign Gold Bonds have a tenure of 8 years, while Relief Bonds have a tenure of 5 to 10 years.

2. Who can invest in an RBI bond?

RBI bonds are open to both individuals and institutional investors. Resident Indians, Hindu Undivided Families (HUFs), trusts, and charitable institutions are eligible to invest in these bonds.

3. What is the maximum investment in RBI bonds?

The minimum and maximum investment amounts vary depending on the type of RBI bond. For example, the minimum investment in Sovereign Gold Bonds is 1 gram of gold, while for other bonds, it could range from ₹1,000 to ₹10,000.

4. Are RBI bonds risk-free?

RBI bonds are considered relatively safe investments as they are backed by the Government of India. However, like any investment, they carry some level of risk, such as interest rate risk and inflation risk