NHAI bonds are a very good alternative investment for conservative investors who desire great assurance as far as steady returns are concerned. NHAI bonds are issued by the National Highway Authority of India. They are not only safe but also come along with tax-saving features, as well as payout interests over the long term. If you're looking for fixed-income government-backed investments, national highway bonds are your answer.
Today's blog post will dissect what NHAI bonds are, such as how to invest in them, the advantages they provide, and the interest rates.
What Are NHAI Bonds?
NHAI bonds, also known as national highway bonds, are fixed-income debt instruments issued by the National Highway Authority of India. Most of these bonds have tenures of 10 to 20 years and are of very long tenure.
These bonds are issued aiming to raise funds to develop and maintain national highways in/to Indian territories. Being government-backed, such bonds are considered an economically safe and steady option for conservative investors.
Why Invest in NHAI Bonds?
There are several compelling reasons why many investors choose to invest in NHAI bonds over other fixed-income options like fixed deposits or corporate bonds. Let’s take a closer look at the key NHAI bond benefits:
Government-Backed Security: Since they are issued by a central government body, NHAI bonds carry minimal default risk.
Tax-Free Returns: Some NHAI tax free bonds (previously issued) offered interest income that was exempt under Section 10(15)(iv)(h) of the Income Tax Act.
Attractive Interest Rates:The typical NHAI bond interest rate ranges between 7% and 8.5%, depending on the series and market conditions.
Long-Term Stability: These are ideal for retirement planning or long-term wealth preservation due to their extended maturity period.
Tradable on Stock Exchanges: Most NHAI bonds are listed, which means they can be traded on NSE and BSE, offering liquidity to investors.
No TDS Deducted: In many cases, interest is paid out without any tax deduction at source (TDS), especially for tax-free bond series.
Types of NHAI Bonds
The National Highway Authority of India bonds are generally issued in the following formats:
Tax-Free Bonds (issued before 2016): These bonds were extremely popular due to their tax-exempt status and were part of the government’s infrastructure funding strategy.
Taxable Bonds: While the interest is taxable, these offer competitive rates and are still attractive to investors in lower tax brackets.
Although new NHAI tax free bonds are no longer issued post-2016, many older bonds are still traded in the secondary market.
NHAI Bond Interest Rate
The NHAI bond interest rate depends on various factors like the bond’s tenure, market demand, and RBI policy. In recent years, interest rates have hovered around:
How to Buy NHAI Bonds
If you’re wondering how to buy NHAI bonds, here are the most common options:
Through Stock Exchanges: Use your demat account to purchase NHAI bonds listed on NSE or BSE. These include both new bond issues (if open) and older bonds in the secondary market.
Through Registered Brokers: Brokers like Zerodha, Groww, HDFC Securities, and ICICI Direct offer bond investment services.
Online Bond Platforms: Portals like GoldenPi, BondsIndia, and Wint Wealth often list available NHAI bonds for direct investment.
Before purchasing, always check the bond’s tenure, yield, interest payment frequency, and rating.
Who Should Invest in NHAI Bonds?
You should invest in NHAI bonds if:
Pros:
If you're looking for a long-term, low-risk investment option, NHAI bonds are worth serious consideration. Backed by the government and structured to support India’s infrastructure growth, these national highway bonds offer peace of mind and predictable income.
Although NHAI tax free bonds are no longer freshly issued, many are still available for purchase on secondary markets. With competitive NHAI bond interest rates, they continue to attract smart investors who value capital safety and long-term gains.
Whether you're a senior citizen planning for retirement or a young investor building a safe portfolio, the choice to invest in NHAI bonds can be a solid step toward financial stability.
Today's blog post will dissect what NHAI bonds are, such as how to invest in them, the advantages they provide, and the interest rates.
What Are NHAI Bonds?
NHAI bonds, also known as national highway bonds, are fixed-income debt instruments issued by the National Highway Authority of India. Most of these bonds have tenures of 10 to 20 years and are of very long tenure.
These bonds are issued aiming to raise funds to develop and maintain national highways in/to Indian territories. Being government-backed, such bonds are considered an economically safe and steady option for conservative investors.
Why Invest in NHAI Bonds?
There are several compelling reasons why many investors choose to invest in NHAI bonds over other fixed-income options like fixed deposits or corporate bonds. Let’s take a closer look at the key NHAI bond benefits:
Government-Backed Security: Since they are issued by a central government body, NHAI bonds carry minimal default risk.
Tax-Free Returns: Some NHAI tax free bonds (previously issued) offered interest income that was exempt under Section 10(15)(iv)(h) of the Income Tax Act.
Attractive Interest Rates:The typical NHAI bond interest rate ranges between 7% and 8.5%, depending on the series and market conditions.
Long-Term Stability: These are ideal for retirement planning or long-term wealth preservation due to their extended maturity period.
Tradable on Stock Exchanges: Most NHAI bonds are listed, which means they can be traded on NSE and BSE, offering liquidity to investors.
No TDS Deducted: In many cases, interest is paid out without any tax deduction at source (TDS), especially for tax-free bond series.
Types of NHAI Bonds
The National Highway Authority of India bonds are generally issued in the following formats:
Tax-Free Bonds (issued before 2016): These bonds were extremely popular due to their tax-exempt status and were part of the government’s infrastructure funding strategy.
Taxable Bonds: While the interest is taxable, these offer competitive rates and are still attractive to investors in lower tax brackets.
Although new NHAI tax free bonds are no longer issued post-2016, many older bonds are still traded in the secondary market.
NHAI Bond Interest Rate
The NHAI bond interest rate depends on various factors like the bond’s tenure, market demand, and RBI policy. In recent years, interest rates have hovered around:
- 7.35% to 8.30% for older tax-free series (based on coupon)
- 6.50% to 7.75% for newer taxable bond series
How to Buy NHAI Bonds
If you’re wondering how to buy NHAI bonds, here are the most common options:
Through Stock Exchanges: Use your demat account to purchase NHAI bonds listed on NSE or BSE. These include both new bond issues (if open) and older bonds in the secondary market.
Through Registered Brokers: Brokers like Zerodha, Groww, HDFC Securities, and ICICI Direct offer bond investment services.
Online Bond Platforms: Portals like GoldenPi, BondsIndia, and Wint Wealth often list available NHAI bonds for direct investment.
Before purchasing, always check the bond’s tenure, yield, interest payment frequency, and rating.
Who Should Invest in NHAI Bonds?
You should invest in NHAI bonds if:
- You want a safe, fixed-income option with low risk.
- You’re looking for long-term investments (10+ years).
- You fall in a lower tax slab (for taxable bonds).
- You missed out on earlier NHAI tax free bonds and want alternatives.
- You prefer steady annual income through interest payouts
Pros:
- Government-backed safety
- Long lock-in period
- Attractive interest rates
- Limited availability of new issues
- No TDS (in most cases)
- Interest is taxable (for new series)
- Listed on exchanges for easy liquidity
- May trade at a premium in secondary market
If you're looking for a long-term, low-risk investment option, NHAI bonds are worth serious consideration. Backed by the government and structured to support India’s infrastructure growth, these national highway bonds offer peace of mind and predictable income.
Although NHAI tax free bonds are no longer freshly issued, many are still available for purchase on secondary markets. With competitive NHAI bond interest rates, they continue to attract smart investors who value capital safety and long-term gains.
Whether you're a senior citizen planning for retirement or a young investor building a safe portfolio, the choice to invest in NHAI bonds can be a solid step toward financial stability.
