8% GOI Savings Bonds


With falling interest rates, investors are on the lookout for alternatives that offer them safety and higher returns than deposits. The 8% Savings Bonds is one such product.

Investors can apply for 8% Savings GOI Bonds in individual capacity, joint basis or any one or survivor. HUF, eligible charitable institutions and minors (with a guardian) can also apply for the bonds. However, NRIs are not allowed in invest in these bonds.

Investors can apply for these bonds only offline by filling up a simple form and using the services of a distributor. The bonds, issued through banks such as SBI, Axis, ICICI and HDFC, and financial institutions, such as Stock Holding Corporation of India, are available in a physical format. Upon allotment, the certificate is couriered to investors. These bonds are not transferable.

Investors can earn an interest of 8% per annum on these bonds and opt for either cumulative or non-cumulative option. In case of the non-cumulative option, the interest is paid half-yearly either on February 1 or August 1. For investors who choose the cumulative option, the value of the investments at the end of six years will be Rs.1,601 for every Rs.1,000 invested.

You need to invest a minimum of Rs.1,000, but there is no maximum limit, but it needs to be in multiples of Rs.1,000. The tenure of the bond is six years from the date of issue.No interest will accrue after the maturity of the bond. The interest income from the bonds is taxable, as per your tax slab.


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