Corporate bonds are debt securities issued by private and public corporations. Companies issue corporate bonds to raise money for a variety of purposes, such as building a new plant, purchasing equipment, or growing the business. When one buys a corporate bond, one lends money to the "issuer," the company that issued the bond. In exchange, the company promises to return the money, also known as "principal," on a specified maturity date. Until that date, the company usually pays you a stated rate of interest, monthly, quarterly, semi annually, annually or at maturity. While a corporate bond gives an IOU from the company, it does not have an ownership interest in the issuing company, unlike when one purchases the company's equity stock.
The 8% Government of India Savings (taxable) bonds, 2003 is a bond issued by the Reserve Bank of India."
The heading is corporate bond while details mentioned GOI Saving bond that too Interest rate 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.
|Maturity Period||6 years|
|Rate of Interest||8.0% per annum (Taxable)|
|Risk Attached||Low Risk|
|Minimum Investment||Rs. 1,000/-|
|Maximum Investment||Unlimited in multiples of Rs.1,000/-|
|Overall Liquidity||Not tradable|
|Date of Issue||Date of realization of the funds|