The most talked-about debt instrument since its launch is RBI Bonds due to its popularity. In the current scenario of falling interest rates of fixed income schemes of commercial banks, RBI Bonds are considered as better options and favorite among senior citizen investors. In today’s article, we will cover RBI Bonds’ 2022 interest rate.
What are RBI Bonds or RBI Floating Rate Bonds Interest Rate 2022?
RBI Bonds are issued by the Reserve Bank of India. These bonds can be purchased by resident individuals or Hindu Undivided Families. These bonds come with a floating rate of interest. Above all, these bonds are issued with a minimum amount of Rs.1000/- the face value and multiples thereof. Most importantly, there is no capping on the maximum amount of investment. These bonds are also referred to as RBI Floating Rate Bonds because the interest rate of the bond would be revised half-yearly starting January 1st and thereafter July 1st every year. The rate of interest is linked to National Saving Certificate with a spread of +0.35 bps over the respective NSC rate.
The salient features of RBI Bonds are:
- It’s 100% risk free investment as backed by RBI of India.
- Maturity is 7 years from the investment date. However, premature withdrawal is allowed for senior citizens.
- Bonds will be issued in demat form.
- Bonds are not meant for trading in secondary market. Neither these bonds can be used as collateral for loan with any banking or financial institution.
- Bonds will be exempt from the the wealth tax.
- Bondholders receive certificate of holding as a proof of investment,
- RBI Bonds are not transferable from one individual to another.
RBI Bonds 2022 Interest-Rate
The coupon rate on RBI Bonds 2022 for the period January 1, 2022 to June 30, 2022 and payable on July 1, 2022 remains at 7.15% (6.80%+0.35%= 7.15%), unchanged from the previous half-year.
RBI Bonds are a hot favorite among senior citizen investors and are ideal to park the lump sum amount. In addition, you get half-yearly returns at a floating rate. Special privilege is given to senior cadre investors as the lock-in period is on a higher end. Therefore, premature redemption is allowed to this investor category as per below age bracket:
|Age Bracket||Lock-in Period|
|60 to 70 years||6 years|
|70 to 80 years||5 years|
|Age of 80 years & above||4 years|
How to Invest in 2022?
In case you have made your mind to invest in RBI Floating Rate Bonds in 2022 then we have already discussed the steps in another article. Here is the link to navigate the article: