Inflation Indexed Saving Bonds from Reserve Bank of India

Inflation Indexed Saving Bonds, Inflation Indexed National Savings Securities.

The Reserve Bank of India (RBI) launched an inflation indexed saving bonds on 23 December 2013. The newly launched indexed savings bonds offer protection to retail investors from price rise. It will be open for subscription between 23 to 31 December.

These securities were launched in the backdrop of announcement made in the Union Budget 2013-14 to introduce instruments that will protect savings from inflation, especially the savings of the poor and middle classes. The minimum limit for investment on the indexed saving bonds is 5000 rupees and maximum is 5 lakh rupees per annum.

Interest rate on these securities would be linked to final combined Consumer Price Index (CPI) Interest rate would comprise two parts – fixed rate (1.5%) and inflation rate based on CPI and the same will be compounded in the principal on half-yearly basis and paid at the time of maturity.

These securities will be issued in the form of Bond to be held in the Bond Ledger Account (BLA) and all the provisions of Government Securities Act, 2006 shall be applicable.

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