Savings Bonds – Know these 5 benefits!

A Savings Bond is a sovereign guaranteed bond meant for small investors. It is backed by the Government of India and subscription to the bond is allowed at any time. These bonds are very popular among investors, especially senior citizens as a way to earn fixed income. The redemption period for such bonds is 7 years, and premature withdrawal is allowed based on the age of the investor. There are many benefits of Savings Bond. This handy guide helps you identify them, so you can make an informed investment decision.

Here are 5 advantages of Savings Bond that you must know about:

  • Low minimum investment:

    The 7.75% Savings Bond has a minimum investment of Rs. 1,000. This investment can be increased in multiples of Rs.1000. This makes the Savings Bond a very attractive investment for all types of investors. Since the minimum investment is so low, people can easily collect their funds and invest in the bonds. It is possible for someone from the economically weaker sections with a bank account to make this investment as well. This is one of the biggest benefits of the Savings Bond.
  • Online and offline application:

    To ensure the application to such bonds is easy for all types of investors, the Government has provided two options for investments. For tech savvy investors, banks offer online application. For those who want to invest in the scheme but can’t manage online applications, there is an offline application procedure. Banks offer the forms for investors at their bank branches.
  • No maximum limit:

    To allow investors to earn from the Savings Bond, the Government has placed no maximum limit for investment in these bonds. This is a good form of passive investment for those who have funds to invest. The Savings Bond offers an excellent rate of interest.
  • Choice of income or capital appreciation:

    An investor can choose to receive interest income or choose the cumulative option and receive interest and principal on maturity. For those who choose the income option, interest is paid twice a year, every six months. For investors who are looking for capital appreciation, the cumulative option provides a maturity value of Rs. 1,703 for every Rs. 1,000 invested.
  • Choice of mode of payment:

    The subscription in these bonds is allowed by paying in cash, demand draft, cheque, or any electronic mode of payment. This makes it easy for the investor to invest funds in this bond.

A Savings Bond is a boon for people looking to earn a stable income from a safe form of investment. So, invest in the Savings Bondtoday!

You can read more on the different facts of Savings Bond here!

Looking to invest in a Savings Bond? Approach your nearest HDFC Bank Branch to know more!

* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.