7.75% savings (taxable) bonds discontinued
Part of: GS-Prelims and GS-III – Economy
In News:
- The Government of India has discontinued 7.75% savings (taxable) bonds, 2018 recently.
Key takeaways
- Recently, repo rate (by RBI) deposit rates (by banks) and small savings rate (by the government) were also decreased.
- Investors were looking for safer investment rather than high returns.
- This led to the high demand for such bonds due to which the government decided to discontinue this option.
- Only fresh issuance of such bonds is discontinued.
Important value additions
7.75% RBI Savings Bonds, 2018
- These were issued in 2018.
- These were available for subscription to resident citizens/Hindu Undivided Family (HUF) to invest in a taxable bond.
- These bonds were first introduced in 2003 as 8% GOI Savings (Taxable) Bonds.
- The interest rate was brought down to 7.75% in January 2018.
- One bond was of Rs 1,000 each.
- The bonds had no maximum limit for investment.
- The bonds had a 7-year lock-in period from the date of issue.
- Premature encashment was permitted to individuals who were 60 years and above.
- Interest on these bonds is taxable under the Income-tax Act, 1961.
