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Tuesday, January 2, 2018

7.75% Savings Bonds Scheme To Replace 8% Bonds Scheme

The 8% Savings Bonds Scheme, also known as RBI Bonds Scheme, is not being closed, the government said today. The 8% scheme is being replaced by 7.75% Savings Bonds Scheme, Economic Affairs Secretary Subhash Chandra Garg said on microblogging site Twitter.  Some reports had earlier said that the government will stop subscription for the 8% Savings Bonds Scheme with effect from January 2. With bank deposit rates falling sharply over the past few years, the 8% Savings Bonds Scheme was a preferred choice for those looking for a regular guaranteed income.

Last month, the government also lowered the interest rate on small savings schemes by 20 basis points. But the interest rate on Senior Citizen Savings Scheme was retained at 8.3 per cent. 

Seven Things To Know About Government of India's 8% Savings Bonds Scheme:


These Government of India bonds have a lock-in period of six years.

The bonds fetched a rate of interest of 8 per cent per annum, compounding on a half-yearly basis.

Investors can choose between the cumulative and non-cumulative modes for payment of interest. 

In the cumulative option, interest is paid on maturity of bonds. In the non-cumulative mode, interest is paid on a half-yearly basis.


The minimum investment is Rs. 1,000 and there is no maximum limit which is in multiples of Rs.1,000.

The cumulative value of Rs. 1,000 invested in the 8% Savings Bonds at the end of six years will be Rs. 1,601.

Like bank fixed deposits, the interest income earned from these government bonds is added to one's income and taxed according to the respective slabs.

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