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| Government Bonds | NHAI Bonds |
| Coupon Rate | 7%-9% (approx) |
| Features | NHAI bonds are bonds issued by the National Highways Authority of India (NHAI), a government body responsible for managing India's National Highways. They are considered to be a safe investment as NHAI has a credit rating of AAA, which is the highest credit rating possible. |
| website | ***********.nseindia.com/get-quotes/bonds?symbol=NHAI |
What are NHAI Bonds?
NHAI bonds are Government bonds issued by the National Highways Authority of India (NHAI). NHAI is responsible for managing India's National Highways of our Country. NHAI Bonds have a AAA credit rating, which is the highest possible. That means it is a safe investment option with tax-free returns.Types of NHAI Bonds?
There are two main types of NHAI bonds:-- Capital Gain Tax-Free NHAI Bonds: Capital Gain Bonds, also known as 54 EC bonds, provide tax exemption on any long-term capital gain if the capital gain arising from such assets is invested in these bonds within six months. The investment in these bonds is capped at Rs. 50 lakh in a financial year.
- Tax-Free NHAI Bonds: tax-free bonds are fixed-income instruments, and as per section 10(15) of the Income Tax Act of 1961, any earnings from this bond are exempted from tax. These bonds usually have a maturity period of 10-20 years.
Features of NHAI Bonds?
| Features of NHAI Bonds | |
| Coupon Rate | 7%-9% (approx) |
| NHAI Bonds Series | NE,ND,NC,NA,N2,N5,N6,N7,N8,N9 |
| Face Value | 1000 Rupees |
| Tax Type | Tax Free |
| Duration | 10–20 years (some are also for 5 years) |
| Rating | AAA (best in the bond market) |
Benefits of NHAI Bonds?
There are several Benefits of Investing in NHAI Bonds-Safe investment- NHAI bonds are considered safe investments as the Government of India backs them with AAA credit certificates.
Regular income- NHAI bonds pay a fixed rate of interest per year, which can act as a
Tax benefits- Tax-free NHAI bonds offer tax benefits to investors(average Tax deduction and also capital gain Tax- deductions)
Ways to Invest in NHAI Bonds?
Are there several ways to invest in NHAI bonds?- Primary Issue - Buying the bonds directly from the government
- Buying Mutual Funds which are investing in such Bonds
- Buying the Bonds from any RBI Approved Banks
How to Apply for NHAI Bonds?
You have to apply for NHAI Bonds by filling out the form and submitting it to the registered Bank.The steps to Apply for NHAI Bonds are as follows:
STEP 1- Download the form below this article or from the NHAI official Website
STEP 2 - Check the list of banks and their branches which will accept the application for the NHAI Bonds from the NHAI official Website
STEP 3 - Fill out the form and submit it to the Bank branch along with the required documents (PAN card, Aadhaar card, cancelled cheque) and the investment amount (through cheque or Demand Draft payable to "National Highway Authority of India" and marked "Account Payee Only")
How to change/update your Bank for NHAI Bonds?
The steps to change your Bank Account for NHAI Bonds are as follows:-STEP 1- Download the Bank Account Changing form from below this article or from the official NHAI website
STEP 2- Now fill it out and submit it to your existing Bank Branch along with the required documents( such as NHAI Bonds paper, PAN card, AADHAAR card, etc
STEP 3- Your bank Account will be shifted to the new bank.
What are some things to consider before investing in NHAI bonds?
Lock-in Period- NHAI bonds often have a lock-in period, typically five years. Withdrawing the money before maturity is very difficult.Interest Rate Fluctuations- Interest rates on NHAI bonds fluctuate, and you need to check the interest rate before investing in the bonds
Lower Liquidity Compared to Stocks- NHAI bonds are generally less liquid than stocks or mutual funds as they are non-transferable, non-convertible and also due to the Lock period
Low fixed interest rates- The interest you get is similar to FD, so research before investing.
Conclusion
NHAI bonds offer a secure investment opportunity with a good return for those willing to invest their money for the long term. The Indian government backs NHAI Bonds to provide steady income through fixed interest payments and tax benefits on the returns. It is best for those trying to save taxes under capital gains. However, the lock-in period and fixed Low interest rates limit flexibility and may be a deal-breaker for some people.NHAI related Documents
NHAI-related documents are attached with this given article-- NHAI BOND APPLICATION FORM
- NHAI BOND BANK CHANGE/UPDATE FORM
