RBI Savings Bonds, the government of India, has allowed its issue from July 1. The fixed interest rate for the period July 1 to December 31 is fixed at 7.15%. It is payable next year on January 1. The interest rate on RBI Floating Rate Savings Bonds will be reset every six months and have a maturity period of seven years. Any resident of India can invest in these bonds irrespective of the age (1).
Investors aged 60 or above can also make premature withdrawals after the end of the minimum lock-in period. Investors for RBI Floating bonds in the age bracket of 60 to 70 years, the minimum lock-in time is six years from the date of issues.
For those belonging to the 70 to 80 years of age bracket, the minimum-lock-in period is five years from the subject. The minimum lock-in period for investors aged 80 years and above is four years from the issue date.
The Criteria for Premature Withdrawal in RBI Savings Bonds
The average population of senior citizens is blooming in India because of the increased life expectancy and refined health services. A person can make a premature withdrawal subject to the submission of DOB documents to the issuing bank’s satisfaction.
Anyone of the holders can fulfill the criteria for premature withdrawals of the RBI Savings Bonds in the case of join holders. However, you won’t get it for free.
If a person makes a premature withdraw, there is penalty for it in RBI Savings Bonds. It includes 50% of the due interest and payable for the previous six months’ holdings.
Notably, a person can’t trade the RBI Savings Bonds in the secondary market. The interest on the RBI Floating Bonds is fully taxable, and that will be deducted while making interest payments on the bonds periodically. Investors can invest in the floating bonds of RBI from 1,000 INR. There is no limit on investment for RBI Savings Bonds.
Author: Rucha Joshi
Source : https://timesnext.com/rbi-savings-bonds-senior-citizens-allowed-to-make-premature-withdrawals/
Date : 2020-08-21T09:49:09.000Z