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The 8% Government of India Savings (taxable) bonds, 2003 is a bond issued by the Reserve Bank of India (RBI) commencing April 21, 2003. The bonds are available for purchase by individuals on tap i.e. you can buy them as and when required. As the name indicates, the rate of interest offered on the bond is 8% per annum. Interest is taxable in the hands of the investor. Since bonds are issued on behalf of the Government of India, it is the safest investment any investor can look for. However, interest on the bonds is taxable and it has a lock in of six years, which makes the bond less favourable over other investment options.
Features of the bond :
The bonds are open to investment by individuals (including joint holdings) and Hindu undivided families/ charitable institutions/universities. There is no investment ceiling on these bonds by these investors. However, nonresident Indians (NRIs) are not eligible to invest in these bonds
The bonds will be issued at par and for a minimum amount of Rs. 1,000 (face value) and in multiples thereof
The bonds will have a maturity of six years, carrying an interest at 8% per annum. Interest on non-cumulative bonds will be payable at half-yearly intervals. Interest on cumulative bonds will be compounded with halfyearly rests and will be payable on maturity along with the principal. The cumulative value of Rs. 1,000 at the end of six years will be Rs. 1,601
  8% Govt. of India Savings Bonds (2003)
 
Tenure Cumulative Half-Yearly
72 months 8.00% 8.00%