InvestorQ : Why is the government stopping the issue of 7.75% taxable bonds?
Juvina Maggie made post

Why is the government stopping the issue of 7.75% taxable bonds?

Answer
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Angel dcosta answered.
5 months ago


One of the most popular debt instruments among the conservative investors, the 7.75% taxable bonds, is being withdrawn effective 28 May. This instrument was quite popular due to its security and the lock in period of just 4-6 years. The last series 7.75% (Taxable) Bonds, 2018, shall cease for subscription with effect from May 28, 2020. One of the advantages of this 7-year bond was the premature withdrawal facility for senior citizens. The government wanted to avoid paying such high interest rates when the 10-year bond had itself reduced to about 6% and banks were offering just about 6.5% on FDs. This is in line with the RBI’s dovish monetary stance.