RBI Inflation linked bonds: important points to remember

 Inflation Indexed National Saving Securities- some important FAQs from exam point of view:

a) Inflation rate for these bonds will be:  Final combined CPI (consumer price index) base: 2010, with lag of 3 months.

b) Eligibility: only retail investor. Individuals, HUFs, charitable institutions, Universities. Maturity period is 10yrs.

c) Interest Rate: 2 parts: i) fixed part: @ 1.5% p.a. (ii) variable: inflation rate.

This fixed rate of interest also acts as floor rate, in case there is deflation in economy.

d) Interest gets accrued & compounded on half yearly basis.

e) Minimum limit: Rs 5000/-, Max- 5lacs per annum per applicant.

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