7.75% Saving Bonds – Application Procedure, Interest & Tax Benefits

The 7.75% Saving Bonds has notified vide notification no. F.No. 4(28) – W&M/2017, dt. 03-01-2018 as amended by notification of even No. dt. 08-1-2018. The complete detail about 7.75% is given below. You can find here the application procedure, maturity, interest, premature encashment, transferbaility, nomination, loan facility and tax benefits.

Who can Purchase?

Any individual (except a non- resident Indian) in his own name (or jointly with another individual on joint/anyone or survivor basic) or on behalf of a minor and/ or Hindu undivided family, may purchase these 7.75% Saving Bonds.

Limit on Investment

The 7.75% Saving Bonds are issued in denomination of Rs. 100/-. Investment should be for minimum Rs. 1000/- and in multiples of Rs. 1000/- with no maximum limit. The bonds will be issued in dematerialised form namely Bonds Ledger Account.

Where to Apply?

  • Application for 7.75% Saving Bonds may be made in prescribed from, in physical form or electronic form, at the designated branches of State Bank of India, or nationalised banks, ICIC Bank, Axis Bank, HDFC Bank and Stock Holding Corporation of India Ltd. (SHCIL).
  • Payment in the form of cash/ bank draft/cheque or by electronic mode should be accompanied with the application.
  • A ‘Certificate of holding’ will be given to the holder evidencing holding of bonds.

Maturity of  7.75% Saving Bonds

  • The 7.75% Saving Bonds will mature on the expiry of 7 years from the date of their issue.


  • The 7.75% Saving Bonds carry interest at the rate of 7.75% p.a. Interest is payable at half-yearly intervals i.e. 31st July/31st January, or is compounded at half-yearly rests, at the option of the subscriber.
  • The maturity value of a cumulative bond is Rs. 1703.

Premature Encashment

Facility is available to individual investors in the age group of 60 years and above, with lock-in-period as under:

Age Group Lock-in period from date of issue
60 to 70 years 6 years
70 to 80 years 5 years
80 years and above 4 years

Inc case of joint holders, any one of the holders should fulfill the age condition.

The investor is required to surrender the bonds at any time after the 12th, 10th, or 8th half-year as applicable, alongwith proof of date of birth. Encashment shall be allowed on the following interest payment due date i.e. 1st August/ 1st February next. 50% of the interest due for the last half-year will be recovered as penalty.


The 7.75% Saving Bonds shall not be transferable. The bonds shall not be tradable in the secondary market.


Facility is available to individuals (except when bonds are held on behalf of a minor). The facility is also available to joint holders.

Loan Facility

Bonds cannot be pledged as collateral for obtaining loans from banks, financial institutions or NBFCs.

Tax Benefits

Tax shall be deducted at source on interest payment (in case of non-cumulative option.), if the interest amount during a financial year exceeds Rs.10,000.

In case of cumulative option, TDS shall apply at the time of payment on maturity if interest amount during a financial year exceeds Rs. 10,000.

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