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New Delhi: Due to the fall in interest rates, the government on Thursday has decided to withdraw the savings (taxable) bond scheme of around 7.75 per cent of banking business.
The plan, commonly known as Reserve Bank of India Bonds or GOI bonds are popular among retail investors looking for principal protection and a regular income. NRIs, however, are not eligible to invest in these bonds.
The notification stated, “The Government of India has informed that the 7.75 percent Savings (Taxable) Bonds, 2018 … will cease to be effective on Thursday, May 28, 2020 with the closure of the banking business.” Wednesday.
The Reserve Bank of India also took cent. (5 percent Savings (Taxable) Bond, 201 too. Notified. Interest on the bond is taxable.
Bonds are issued for Rs 100. The minimum membership was fixed at Rs 1,000.
According to the plan, the bonds are repayable at the end of seven years from the date of issue.
The interest rate on bank fixed deposits as well as lending rates is declining, with the Reserve Bank of India lowering its prime short-term lending (repo) rate. The repo rate is currently at a historic low of 4 percent.
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