Govt of India (GOI) has announced the sale (Re-issue) of 6.80% Government bonds maturing in 2060. Retail investors can participate in this sale via the NSEgoBid platform on 6th and 7th Oct 2020 (10 am to 5 pm). The auction will be conducted by the RBI on 9th Oct.
Details of the 6.8% GOI Bond: 680GS2060B – GS (6.80% GS 2060). Price per Security Rs. 107.00. Min Bid & Multiples Rs. 10,000.00 and Max Bid 2.00 Crores. The interest will be paid twice a year (3.4% each) in April and October. This bond was issued on 31-Aug-2020 and will mature on 15-Dec-2060. The interest payment will be in Feb and Aug.
What investors should know before buying: NSEgoBid is a buying-only platform. You can attempt to sell these only via a depository participant who is also an NSE trading member. Therefore please find out more about this form your Demat provider before buying. Kindly consult a SEBI registered fee-only advisor if you need advice.
This is a 40-year bond. So it should only be used if you want regular income over that period. Make sure you have a nominee for the demat account and suitable will. In general, it is better to assume that once purchased it would be hard to sell these bonds as retail participation would be less. So do not buy unless you intend to hold until death and transmission thereafter.
We had discussed more who should use these bonds before: Can I get a pension using GOI bonds instead of LIC pension? Those interested in these bonds may refer to this article to understand the difference between GOI bond interest income and insurance annuity income (pension scheme).
Caveats: (1) you may bid but not get allotment; (2) future auctions may be (or may not be) for bonds that provide higher interest rate: see list of outstanding GOI bonds
Other securities available for bidding bet Oct 6th and 7th 2020:
- 577GS2030D – GS (5.77% GS 2030)
- NWGF2033H – GF (GOI FRB 2033) (this is a floating rate bond). You can learn more about these here: RBI Floating Rate Savings Bonds 2020: Should you buy?. Note: A GOI bond and an RBI bond are two different products
- 509GS2022L – GS (5.09% GS 2022)
Useful links for further study
- Government Securities Market A Primer by RBI
- Non-competitive Bidding Facility for Dated Securities and Treasury Bills of the Government of India
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