1. What is Bharat Bond and why should I consider investing in it?
Bharat Bond is a bond issued by the Government of India through a special purpose vehicle called Edelweiss Alternative Asset Advisors Limited. It aims to provide retail investors with a transparent and low-cost investment option. Here’s why you should consider investing in Bharat Bond:
– Safety: Bharat Bond invests in bonds issued by public sector companies, which are backed by the Indian government. This ensures a high level of safety for your investment.
– Regular Income: Bharat Bond offers a fixed coupon payment, providing investors with a regular stream of income.
– Diversification: Investing in Bharat Bond allows you to diversify your investment portfolio by adding fixed income instruments to your holdings.
– Transparency: As an exchange-traded fund (ETF), Bharat Bond offers transparency in terms of the underlying bonds it holds and its portfolio composition.
– Tax Efficiency: Bharat Bond enjoys tax benefits for retail investors, providing an added advantage.
2. How can I buy Bharat Bond?
To buy Bharat Bond, follow these steps:
1. Identify a stockbroker or a mutual fund distributor that offers Bharat Bond as an investment option.
2. Open a trading and demat account with the chosen stockbroker or mutual fund distributor if you don’t have one already.
3. Complete the required Know Your Customer (KYC) formalities, providing the necessary documents such as proof of identity and proof of address.
4. Once your account is active, log in to the online trading platform or visit the physical office of your chosen stockbroker or mutual fund distributor.
5. Search for “Bharat Bond” on the platform or consult with the representative at the physical office.
6. Select the desired series of Bharat Bond based on the maturity date that aligns with your investment goals.
7. Specify the quantity of bonds you want to purchase and place the order.
8. Make the payment using the available payment options offered by the stockbroker or mutual fund distributor.
9. After payment confirmation, the Bharat Bond units will be credited to your demat account.
10. Keep track of your investment and review performance periodically.
Remember to consult with a financial advisor or conduct thorough research before investing in Bharat Bond.
3. Can I buy Bharat Bond directly from the Government of India?
No, you cannot buy Bharat Bond directly from the Government of India. Bharat Bond can be purchased through authorized stockbrokers or mutual fund distributors. These intermediaries facilitate the buying and selling of Bharat Bond units on behalf of investors.
4. Are there any eligibility criteria for investing in Bharat Bond?
Yes, there are a few eligibility criteria for investing in Bharat Bond. They include:
– Investors must be residents of India, including individuals, Hindu Undivided Families (HUFs), and eligible institutions.
– Individuals must be at least 18 years old or the age of majority as per their state laws.
– KYC formalities must be completed as per regulatory requirements.
– Investors should have a valid demat account.
– Foreign portfolio investors (FPIs) are currently not eligible to invest in Bharat Bond.
It is advisable to consult with your stockbroker or mutual fund distributor to ensure you meet the eligibility criteria before investing in Bharat Bond.
5. Can NRIs (Non-Resident Indians) invest in Bharat Bond?
Yes, Non-Resident Indians (NRIs) are eligible to invest in Bharat Bond. However, they need to fulfill the following conditions:
– The investment should be made on a non-repatriable basis.
– NRIs should have an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) bank account.
– They must hold a demat account with a designated depository participant in India.
NRIs should consult with their bank, stockbroker, or mutual fund distributor for specific guidelines and regulatory requirements related to investing in Bharat Bond.
6. What is the minimum investment required for Bharat Bond?
The minimum investment required for Bharat Bond is Rs. 1,000. This means you can purchase Bharat Bond units for a minimum amount of Rs. 1,000. However, you can invest a higher amount based on your investment goals and risk appetite. It is important to note that the minimum investment amount may vary depending on the series of Bharat Bond chosen.
7. What is the maturity period of Bharat Bond?
Bharat Bond offers two series with different maturity periods:
– Bharat Bond ETF April 2025: This series has a maturity period of approximately five years, providing investors with stable returns over a medium-term investment horizon.
– Bharat Bond ETF April 2030: This series has a maturity period of approximately ten years, suitable for investors looking for long-term investment options.
Investors can choose the series that aligns with their investment goals and time horizon. It’s important to note that the redemption of Bharat Bond units will occur automatically upon maturity.
8. Is there a lock-in period for Bharat Bond?
No, there is no lock-in period for Bharat Bond. Investors have the flexibility to buy or sell Bharat Bond units as per their investment requirements. However, it is advisable to consider the investment horizon and potential income tax implications before making any investment decisions.