GOI Bonds: Safe Bonds to Invest In

GOI Bonds: Safe Bonds to Invest In

Government of India (GOI) 8% Savings (Taxable) Bonds are the safest bonds to invest in. They are backed by the full faith of Government of India. This is also known as Gilt Bonds. Anyone’s portfolio should have GOI Bonds allocation.

And GOI Non-taxable bonds offer 6.5% Annual interest. The main advantage of investing in GOI Bonds in current economic environment is that, the Indian Economy (2009) is in deflation right now. Yes, Right now the inflation in India is –1.5% which makes this Investment even more lucrative.

Because of the deflation, the real return from GOI Bonds is +9.5%. And that’s amazing thing. There is an old saying that, It is better to be a lender rather than borrower during the time of deflation.

Alternatively, Corporate Bonds and Commercial Papers are also available for Investments. But these instruments are out of reach from the small investor. The only way to invest in Corporate Securities is via Debt Mutual Funds.

But the best thing about GOI Bonds is that, anyone in India can invest in it. The maturity period of each GOI Bond is 6 years. Like Treasury Securities of USA, GOI Bonds are the safe heaven for your money. GOI Bonds will not only preserve the purchasing power of your money but it will provide you a handsome return every year of half yearly.

Right now my 10% Portfolio is in GOI Bonds. Another great advantage of GOI Bonds is that, you can get a loan against it also. So in case of Emergency, you can raise money from it also.