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Minimum Investment Requirements for Bonds: A Comprehensive Guide

Updated: Jan 9

The minimum investment required for bonds varies depending on the type of bond, the issuer, and the platform through which you invest. Here's a breakdown of the typical minimum investment amounts for various types of bonds:

1. Government Bonds

  • Government of India Savings Bond (GOI Savings Bond): The minimum investment is usually ₹1,000, and you can invest in multiples of ₹1,000.

  • Sovereign Gold Bonds (SGBs): The minimum investment is 1 gram of gold (which typically equates to around ₹5,000–₹6,000, depending on the price of gold). For subsequent investments, you can invest in multiples of 1 gram.

2. Corporate Bonds

  • The minimum investment in corporate bonds is generally higher. It can range from ₹10,000 to ₹1 lakh, depending on the bond's issuer.

  • For instance, most high-rated corporate bonds (e.g., from companies like Reliance, HDFC, or Tata) may have a minimum investment of ₹10,000 or ₹1 lakh.

3. Municipal Bonds

  • Municipal bonds issued by local government bodies or authorities may have a minimum investment amount that starts from ₹10,000 or ₹1 lakh.

4. Bonds Under Section 54EC (Capital Gain Bonds)

  • The minimum investment for Section 54EC bonds (issued by NHAI or REC) is typically ₹10,000 or ₹1,000, depending on the specific bond. However, to avail of tax exemptions, you cannot invest more than ₹50 lakh in these bonds per financial year.

5. Public Sector Bonds (PSU Bonds)

  • PSU bonds (like those issued by entities like BHEL, Power Finance Corporation, or Indian Railways Finance Corporation) often have a minimum investment requirement of ₹10,000 or more, though the specific amount depends on the issuer.

6. Bonds Traded on Stock Exchanges

  • For bonds that are listed on stock exchanges, the minimum investment is typically determined by the lot size set by the bond issuer. Lot sizes may range from ₹10,000 to ₹1 lakh, depending on the bond and exchange platform.

Key Takeaways:

  • For government and sovereign bonds: The minimum investment is usually low, starting from ₹1,000.

  • For corporate bonds: The minimum investment is often higher, typically starting at ₹10,000 or ₹1 lakh.

  • For municipal and PSU bonds: The minimum amount can vary but generally starts at ₹10,000.

  • Section 54EC bonds: The minimum investment is typically ₹10,000, and the maximum is ₹50 lakh per financial year to claim tax exemptions.

Always check the specific bond issue's terms and conditions to know the exact minimum investment requirement before investing.

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