How to buy or invest in 7.75% Government of India Savings Bonds?

How to buy or invest in 7.75% Government of India Savings Bonds? What are the things we have to take care of before blindly buying this 7.75% Government Of India Savings Bonds?

Features of 7.75% Government Of India Savings Bonds (Taxable)

Features and Eligibility of 7.75% Government of India Savings Bonds

# HUF and Individual (Single, Jointly, Either or Survivor, or on behalf of minor as a Guardian are allowed to invest in these bonds.

# This bond is not available for NRIs.

# Minimum amount is Rs.1,000 (face value of the bond) and there is no maximum limit for investment.

# The Bonds will be issued, in demat form and credited to the Bond Ledger Account (BLA) of the investor/s on the date of tender of cash or the date of realization of draft/ cheque.

What is the return of 7.75% Government of India Bonds?

The Bonds will bear interest at the rate of 7.75% per annum. Interest on non-cumulative Bonds will be payable at half-yearly intervals from the date of issue (The date of issue of the Bonds in the form of Bonds Ledger Account, will be opened (issued) from the date of tender of cash or the date of realization of draft/cheque.) or interest on cumulative Bonds will be compounded with half-yearly rests and will be payable on maturity along with the principal.

In the cumulative Bonds, the maturity value of the Bonds shall be Rs.1,703 for every Rs.1,000 face value of the bond.

Interest to the holders opting for non-cumulative Bonds will be paid from the date of issue up to 31st July OR 31st January as the case may be, and thereafter half-yearly for a period ending 31st July and 31st January on 1st August and 1st February.

Interest on Bonds in the form of “Bonds Ledger Account” will be paid, by electronically by credit to bank account of the holder as per the option exercised by the investor/holder.

The advice of payment of interest will be issued to the investor one month in advance from the due date. Maturity intimation advice will be issued one month before the due date of the bond.

Facility for payment of interest and principal by ‘demand draft free of cost or at par cheques’ for up country customers is available. The facility of the intra-bank branch and interbank branch transfer of the bonds is available.

Do remember that you can’t change the bond option in middle from Non-Cumulative to Cumulative and vice versa.

Note:-You have to receive the redemption procedure at maturity or as and when the interest is payable. The government will not pay any interest on such interest income which is not claimed or any principal amount that also not claimed by investors.

Term of the 7.75% Government of India Bond

The bond tenure is 7 years from the date of issue. However, you can opt for premature redemption as per the Govt. Notification dated July 29, 2013, and subsequent amendment vide Notification dated August 16, 2013. It is discussed as below.

Premature encashment in respect of the Bonds shall be allowed for individual investors in the age group of 60 years and above, subject to submission of document relating to date of birth of the an investor in support of age to the satisfaction of the issuing bank, after minimum lock-in period from the date of issue as indicated below-

(a) Lock in period for investors in the age bracket of 60 to 70 years shall be 6 years from the date of issue.

(b) Lock in period for investors in the age bracket of 70 to 80 years shall be 5 years from the date of issue.

(c) Lock in period for investors in the age of 80 years and above shall be 4 years from the date of issue.

In case of joint holders or more than two holders of the Bond, the above lock-in period will be applicable even if any one of the holders fulfills the above conditions of eligibility.

After aforesaid minimum lock-in period from the date of issue, an eligible investor can surrender the bonds at any time after the 12th, 10th and 8th half year corresponding to the respective lock-in period but redemption payment will be made on the following interest payment due date.

Thus, the effective date of premature encashment for eligible investors will be 1st August and 1st February every year. However, 50% of interest due and payable for the last six months of the holding period will be recovered in such cases, both in respect of Cumulative and Non-cumulative bonds.

The Bonds are nottransferable.  The Bonds are nottradeable in the Secondary market and are noteligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions.

An earlier version of the bond period was 6 years.

Nomination facility in 7.75% Government of India Bonds

The sole Holder or all the joint holders may nominate one or more persons as a nominee. Non-Resident Indians (NRIs) can also be nominated. However, remittance of the interest/maturity proceeds will be subject to the foreign Exchange regulations prevailing at the time of remittance.

If the nomination has been made in favour of two or more nominees and either or any of them dies before such payment becomes due, the title to the Bonds shall vest in the surviving nominee or nominees and the amount being due thereon shall be paid accordingly.

In the event of the nominee or nominees predeceasing the holder, the holder may make a fresh nomination. You can make a separate nomination for each investment.

The nomination is not allowed where the bonds are held in the name of the minor. A nomination made by a holder of a Bond can be changed by a fresh nomination in Form B, or as near thereto as may be, or may be canceled by giving notice in writing to the Receiving Office in Form C,

If the nominee is a minor, the holder of Bonds may appoint any person to receive the Bonds/amount due in the event of his / her / their death during the period the nominee is a minor.

You can change the nomination as and when you need.

Taxation of 7.75% Government of India Savings Bonds

Interest income from 7.75% Government of India Savings Bonds will be taxable. However, there is no wealth tax you have to pay. Tax will be deducted at source (TDS) while interest is paid.

The Bonds will be exempt from wealth-tax under the Wealth Tax Act, 1957.

I explained basic features in below image for your easy understanding.

How to buy or invest in 7.75% Government of India Savings Bonds?

You can buy 7.75% Government of India Savings Bonds from designated branches of SBI and Associate banks,18 Nationalised banks, 3 Private Sector banks (like HDFC and ICICI Banks) and Stock Holding Corporation of India Ltd. I have listed them as below.

# State Bank Of India

# Allahabad Bank

# Bank of Baroda

# Bank Of India

# Bank Of Maharashtra

# Canara Bank

# Central Bank Of India

# Dena Bank

# Indian Bank

# Indian Overseas Bank

# Punjab National Bank

# Syndicate Bank

# UCO Bank

# Union Bank of India

# United Bank Of India

# Corporation Bank

# Oriental Bank Of Commerce

# Vijaya Bank

# IDBI Bank

# ICICI Bank Ltd.

# HDFC Bank Ltd.

# Axis Bank Ltd.

# Stock Holding Corporation of India Ltd.

The application form looks like below.

Application form to buy or invest in 7.75% Government of India Savings Bonds?

Download the Application form to buy or invest in 7.75% Government of India Savings Bonds.

Where to complain in case of 7.75% Government of India Savings Bonds?

If you have any issue with Bank regarding this bond, then you can contact RBI directly using below details.


Otherwise, you can also use the below address.


7.75% Government of India Savings Bonds -Should you invest?

Let us now discuss about who should consider this bond.


The biggest positive point is that SECURITY of Government of India. No question of default risk in such bond. Hence, you can invest blindly without any doubt.


If you look at SBI FD Rate for 5 Yrs to 10 Yrs deposit, it is at 6%. Also, the current Post Office 5 Yrs FD rates are lower. Hence, I think this bond is definitely the BEST option who are looking for SAFETY and also the GUARANTEED return.


I compared the interest of similar tenure products. Hence, do remember that invest in such bond only if your goal is 5 years or so. Also, if you are looking for some constant stream of income, then also you can look at such bond.

But never invest for the sake GUARANTEE and RETURN.

If your goal is more than 5 years or so, then use the products like LIC’s Jeevan Akshay VI or Pradhan Mantri Vaya Vandana Yojana. If you are a senior citizen, then you can opt for Post Office SCSS Scheme.


Whatever the return you will receive from this bond is taxable and also TDS is applicable. Hence, don’t rely on 7.75% return. But try to consider the post-tax return.

Suppose your income is less than Rs.2,50,000 then the effective return will be 7.75%.

Suppose your income tax slab is at 10%, then the effective return will be 6.975%

Suppose your income tax slab is at 20%, then the effective return will be 6.2%

Suppose your income tax slab is at 30%, then the effective return will be at 5.425%


Even though there is no default risk, there is always an interest rate risk. We don’t know the applicable interest rate after 7 years of maturity. Hence, this interest rate risk is always there.

However, considering the past trend, I am not sure that the Government will close the subscription within 4-5 years.

Go ahead to buy these bonds based on the above points. Blindly for the sake of GUARANTEE and RISK-FREE return always not works.

For a complete post, refer my old post “7.75% Government of India Savings Bonds -Should you invest?“.

Conclusion:-Due to credit Risk or Default Risk many are looking for safe investment. In such a situation, where debt products are risky and equity market down, the best option is to go for such the safest product. However, consider your actual requirement, taxation, and liquidity issue also before BLIND JUMPING.

Refer our latest posts:-

31 thoughts on “How to buy or invest in 7.75% Government of India Savings Bonds?”

  1. Not all Info provided by Mr Basu on one of the main concerns of most people in this bond including myself.
    Main Qs is how can you access your BLA (Bond Ledger Account) online. The answer is its difficult if you are with discount broker like Zerodha like myself. First I checked you cannot buy through them. You have to buy only through one of the banks. However you cannot view your investment online with the bank through BLA etc. if you do not have demat account with them, for which you will have to pay expensive demat maintenance charges every year (and also might be forced to have 3 in 1 i.e trading account) just to follow and view the Bond/ BLA online. I only trade through zerodha so opening another trading + demat with bank will not be used much.
    I did a test/experiment – bought 1000 Rs worth Savings bond from HDFC. They just issued physical copy through post and now I’m not able to view anything online . Did same experiment through ICICI for 2000 Rs, they didn’t issue physical copy and just sent an email with of copy of certificate. In both HDFC and ICICI , I need to open demat account to see Bond online. I was thinking that these bonds might appear in CDSL account but they have not – at least the govt should have ensured this much – my worry is that there is just a email/ physical copy for a heavy investment – it can get lost etc. over the years with no way of viewing it online.

  2. Who will generate and issue the BLA number – Bank,RBI, or Demat depository ??

    Can you share the sample of BLA account number ?

    After My initial investment, can I make additional investment to the same BLA number from another Bank ?

    How Can I access my BLA statement ?

      1. I had written question because I did not find the information in the above post.

        Anyways I found my answers with RBI, thanks for redirecting me to RBI.

  3. I have purchased jointly 7.75% RBI Bond by online from Stock Holding Corporation of India Limited on 28/5/2020, last date, and I have received BLA ( Bond Ledger Account ) and also statement of holding from them by email. Due to COVID time, It is not possible to submit signed copies of the application etc. to them , I have not yet received Certificate of Holding from them as yet.
    My question is on the basis of above,whether I will receive interest upto 31st July on 1st August’2020 , whether and how I can watch and follow my investment In my DEMAT Account CDSL and relevance of submission of hard copies duly signed by the joint applicants to them

  4. If we buy through online channel of a private bank, is there any way, we can be assured that bond certificate is not fake? If during the bond life, Private bank defaults or become insolvent how can we get back our money at the time of maturity? Please suggest. If possible please provide ur contact details.

  5. The day you put this article next day I approached corporation bank, they don’t have any clue on these bonds. I am surprised how come the PSU doesn’t has any info. Very strange and very difficult to buy these bonds. Now I am enquiring SBI yet to get info. I also approached the demat service providers upstox and zerodha. Upstox came back with reply and told to contact banks for purchase of these bonds. They also told to give the demat account details for credit of interest rates and also asked to mention the DP name CDSL. Where as zerodha they never replied such a worst customer service.
    Basavaraj sir your article gives info on these bonds but miserably fails on how to invest in these bonds. Please provide info sir otherwise just read the article and forgot about buying these bonds.

  6. Soumya Bhattacharya

    Can I buy GOI 7.5% bonds from HDFC securities trading account? How else can I buy this online without going to bank in Covid times?

  7. Dear Basu

    If we invest the same money in Fixed Maturity Plans (FMP) of 3 years or more and even if they give you a return of 6.5 % annualized, the post tax return would be 5.85 %, better than these bonds. The maturity period of Bonds is seven years. During that period money can be revolved twice in FMP.

    After taxation return is about 5.1 %. What do you say?

    1. Dear Bhuwalka,
      Considering the way fund managers are playing with our money debt space, expecting 6.5% returns and that too from FMP is hard to believe. Such bonds are for those who are looking for safety and guaranteed returns than the risky debt funds.

  8. Hello Sir,
    Hope you are doing well.

    Is it mandatory, one has to have Demat account to buy GOI bonds ?
    I read somewhere that without Demat account one can buy GOI bonds from SHCI . Is that true ?

    Can you please clarify ?


  9. When you say that ”The Bonds will be issued, in demat form and credited to the Bond Ledger Account (BLA) of the investor/s”, here demat means what we usually have to hold stocks (like zerodha, icici direct, sharekhan etc.) right so something else ?

    & then what is this Bond ledger account ?

  10. HI,
    Can I buy these bonds using SBI online account? or demat mandatory? Can I use the zerodha or upstox for buying these bonds ?
    Thanks in advance

  11. Dear Basu sir,

    Can we submit 15G/H to avoid TDS. I do understand by avoiding TDS I am not avoiding tax. I inquired this with ICICI bank staff and customer care few months back. But none of them know about this scheme. So if you can provide us the list of branches that accept applications that would do a world of good. Is there any way to apply online?


    In cumulative bond entire interest of 7 years is becoming taxable at the time of maturity. Like cumulative FD, accrued interest cannot be included in taxable interest on yearly basis . Bank does not even issue interest certificate for cum bonds on yearly basis as in their books of account they are not making yearly provision.
    I realised this point after buying the cumulative bond by exchanging e mails with issuing bank as this is not mentioned any where in application form.

    Above treatment may result your tax rate in year of maturity shooting up.

    I can share e mails with you if you so desire .

    1. Dear Dipak,
      While filing IT returns, you have two options. The first is to show as and when the interest accrue or at maturity. Sadly, if they are unable to provide the data for the same, then you can do the calculation on your own and file IT return.

  13. Thanks for nice article about Government Bonds. 1.NRI from NRO PIS account is eligible to buy in Secondary market through Dmat account. 2. Please advise and give some safe investment ideas for Long term to invest in Bonds , NCD.

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