Thursday, 22 December 2011

New REC infrastructure bond offer 8.95% & 9.15%

REC issues new Infrastructure bond suitable for Income Tax Exemption under section 80CCF with 8.95% & 9.15% annual interest for 10 & 15 years maturity. REC (Rural Electrification Corporation, a Navaratna company offer this bond as non convertible long-term infrastructure bond. Like all other approved infrastructure bond an investment in REC infrastructure bond also get tax exemption under section 80CCF of income tax rule up to Rs. 20000 in addition to Rs, 100000 under section 80C.

Date of issue and closing date: The issue opened in the market on 19th December, 2011 and closing date is 10thFebruary, 2011.

Face value & minimum investment: Face value of one bond is Rs. 5000 and the least required investment is one bond for Rs. 5000 only. There is no maximum limit of investment for this REC infrastructure bond.

Maturity and buyback option: According to maturity period the bonds are two types such as 10 years and 15 years bond. But you can choose buy back option after 5 years (16th February, 2017) and 7 years (16th February, 2019) for 10 years and 15 years bond.

Rate of interest and interest payment: Rate of interest of REC infrastructure bond is 8.95% and 9.15% respectively for 10 years and 15 years bond. You can choose annual interest payment option or compound interest payment option for both 10 years and 15 years bond.

Maturity value and buy back value: The maturity value of 10 years compound interest option will Rs. 11783 and for 15 years bond will Rs.18592.  For 10 years compound interest bond can get Rs. 7677 on buy back option on 5 years + 1 day and for 15 years compound interest option can get Rs. 9231 on buy back option on 7 years +1 day. But for annual interest payment option the maturity value and buy back value will Rs. 5000 for all cases.

Lock in period: Lock in period of REC infrastructure bond is 5 years and after 5 years the bond proposed to list in BSE /NSE and can trade like any other listed bonds, if allotted in demat mode. Bonds can apply for physical mode also.

Who can invest: REC infrastructure bond is for Resident Indian Individuals (Major) and HUF through Karta of the HUF by both demat mode and physical mode.

How to invest: You can download REC infrastructure bond application form and can give in HDFC Bank, Indusind Bank orKotak Mahindra Bank

This is time of tax saving investments and we hope that this infrastructure bond by also accept by investors for saving their tax under section 80CCF.

REC infrastructure bond offer 8.95% & 9.15% interest

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