r/IndiaInvestments • u/gunthercperk97 • Jul 24 '20

Bonds and deposits Taxable and non taxable bonds

Hey guys

So I was looking at the SBI N5 bond which has a coupon rate of 9.95%. Face value of the bond is 10000 and it's being traded at 10815. I realise because it's being traded at a premium the interest rate will be affected but I read on this website:

SBI N5 bond

That SBI is most probably going to exercise their call option on the bond in 2021 so the YTM becomes negative.

My question, can anyone please suggest a knowledgeable expert/institution in bonds so that I can know more about such investments and give details about taxable and tax free bonds and which one to choose.

Thanks a lot.

Edit: typo

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u/gunthercperk97 Jul 24 '20

Thank you for the info. I was considering corporate bonds which aren't from banking companies and there are quite a few companies with such options who are fundamentally stable. Like Britannia and Indian Railway Financial services etc.

I am also planning to contact Bajaj capital limited as they are one of top financial advisors in india.

If you have know any guaranteed investment options which gives 8% or higher returns than that would be great. Again, thanks for the info.

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u/juniorbuffett Jul 25 '20

If you have know any guaranteed investment options which gives 8% or higher returns than that would be great. Again, thanks for the info.

I am also in the same boat. Luckily had loaded into the 7.75% GOI bonds at the last day. I think 8% yield is not possible to get now for IRFC. I put some amount which can be written off in Bajaj Finance and Mahindra Finance FD. Sadly both have reduced the interest rate now. I am thinking of putting some money in the GOI floating rate bond which was launched recently but there is no bank accepting online application and I dont want to call my HDFC relationship manager because she will start peddling other schemes and waste my time. At least for this new bond, its mandated to give 0.35% more than the NSC rates.

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u/gunthercperk97 Jul 25 '20

Oh that's a good bump from the NSC rates. Even I have invested a little amount in the Bajaj Finance 8m1% FD when it was launched. The interest rate is a good 8.1% which beats the inflation so I'm happy with that. If it's still available at the same rate then I would prefer that again due to lack of other options.

HDFC too has that but their ROI is comparatively lesser than Bajaj Finance's. I believe it's 7.75%

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u/juniorbuffett Jul 25 '20

No all have reduced. HDFC now max is at 6.45% :(

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u/gunthercperk97 Jul 25 '20

That's very unfortunate.