RBI's inflation index bonds better than bank FD for retirement savings
December 31, 2013
RBI launched inflation indexed bonds will be available till 31st December. The good news is that the rate will be linked to CPI instead of WPI - the less accurate gauge of inflation. The bad news is that early redemption, even after the lock-in period is over, will entail hefty penalty. Should savers bite into the offering?
Raj Pradhan
The Reserve Bank of India (RBI)’s Inflation Indexed National Savings Securities-Cumulative (IINSS-C) securities are open for subscription till 31st December. The central bank is using authorised agency banks and Stock Holding Corporation of India (SHCIL) to invest in IINSS-C. The authorized banks are State Bank of India (SBI) and its associates, all nationalized banks, HDFC Bank, ICICI Bank and Axis Bank.