What are infra bonds? There is a financial investment scheme known as infrastructure bonds in India. A bond is a long term debt investment, and is an agreement between the lender and the issuer of the bond (the government). In such a type of investment scheme, investors invest their money by buying bonds. This money goes to the government for funding infrastructure, and once the bond matures, you receive your principal amount plus the interest. Interest on infra bonds is usually received once in every six months.
Infrastructure bonds for intended for those who are seeking long term debt investment of 10 to 15 years, and can be purchased from non banking financial corporations. These corporations are a link between the government and investors, and are appointed by the government.
What are the benefits? A good thing about investing in infra bonds is that firstly, you can get tax benefits of up to Rs. 20,000 and secondly, you are directly helping the nation in its pursuit of progress! This is one of those ways where you can contribute to the nation, and receive monetary benefits for the same. Infra bonds are considered one of the safer avenues to invest your money. They directly deal with the government, and are the amount of risk associated with them is low. That’s why investing in infrastructure bonds is a sound investment advice from our side.
What is the minimum investment and interest rates? The minimum investment usually starts from Rs. 5000. You have to invest for a period of at least 10 years but most corporations offer a buy back scheme wherein you can get your principal sum after 5 years or so. Interest rates on the same usually vary between 7.5-8.5%. This implies that if you invest Rs. 100,000 on infrastructure bonds, you will receive Rs. 7500-8500 annually. So over a period of 10 years, you can literally earn Rs. 75,000-85,000 on your Rs. 100,000!
Infrastructure bonds are a really good low risk and long term investment option amidst other investment options. Other similar low risk investment options include fixed deposits, buying affordable health insurance plans, depositing money in savings accounts etc. And always remember, higher the amount of money you invest, more is the interest you’ll receive on these investments.