RBI bonds perfect for risk-averse investors

Biannual interest payment ensures regular income

- SAIKAT NEOGI

WITH BANKS REDUCING deposit rates, investing in RBI Floating Rate Savings Bonds is an ideal alternative, especially for senior citizens who depend on stable, regular income.

The bonds carry sovereign backing and are currently offering an attractive yield of 8.05%, significantly higher than most senior citizen bank fixed deposits.

These bonds have a tenure of seven years, and the interest payout frequency is half-yearly—on January 1 and July 1 each year. While the minimum investment amount is ₹1,000, there is no upper limit of investment in these bonds. The coupon will vary during the tenure and is based on the rate of interest of National Savings Certificates (NSC) plus a spread of 0.35%.

Vishal Goenka, co-founder, IndiaBonds.com, says these bonds provide excellent credit safety and reliability.

"For senior citizens seeking predictable returns and protection against interest rate volatility, allocating capital to RBI Floating Rate Savings Bonds improves their income certainty," he says.

Ease of investing