What Are The Safe Investments With Good Returns?

By Author: Maithili Pawar
Total Articles: 23
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Looking to sell your property but worried about paying gains tax? Looking for a safe return-investment option? Do not worry. We shall tell you how to save on fees for any long-term investment.

Indian government Savings Bonds can be the answer to your needs. Often known as 7.75 per cent Savings (Taxable) Bonds, 2018, the Reserve Bank of India (RBI) issued these bonds. They hold a fixed seven-year tenure. The original scheme, launched in 2003, offered an 8 per cent return, but in 2018, India's government reduced it to 7.75 per cent. They are backed by the government and deemed safe.

Those bonds issued by the RBI are available at most banks in the public and private sectors.

Types of government savings bonds:

• Non-cumulative or semi-annual: You will be paid half-yearly with the interest you receive on non-cumulative GOI bonds. You will be paid interest, depending on when you purchase the bond, from the date of issue until July 31 or January 31. The interest is calculated semi-yearly after this. Thus, the interest gets credited on August 1, for the date ending July 31. Interest gets credited on February ...
... 1, for the period ending January 31.

• Cumulative: In this case, the interest gets calculated semi-annually but paid upon maturity. Half-yearly interests, therefore, compound the interest rate of 7.75 per cent per annum. Together with the principal, you will receive the entire interest received upon maturity.

Another option is to invest in Capital gain bonds. A long-term capital gain is any income you derive from the sale of an asset. The asset could be land, real estate or even investment. You are accountable to pay tax for such gains, following the Income Tax Act. You can reduce the liability for those taxes, however.

To take advantage of tax deductions in the future, invest in section 54EC bonds. The bonds are issued in compliance with the rules of IT Act section 54EC.

capital gain bonds are safe, secure and have a decent interest rate. Here are some of the principal features of 54EC bonds.

• Interest: Section 54EC bonds offer a 5.75 per cent interest rate. Interest earned yearly, is taxable on the bonds.
• Tenure: For five years, you can invest in those bonds, which is also the lock-in period.
• Safe: The bonds to the capital gain are rated AAA and are secure. Undertakings in the public sector back them, and therefore the default rate is low.
• Transferability: The 54EC bonds are not transferable at any time from one person to another.

Author bio: Maithili Pawar is a financial expert with 5-plus years of experience in investment banking. In her free time, she writes on trading topics. In this, she has explained everything about goi bonds and listed safe investment tools