Here’s what I suggest. Ignore all those complicated analysis (an example) of yields and returns and comparisons with other fixed-return financial products. Buy these bonds if and only if:
- Your objective is to lower your income tax, and
- You fall in one of the highlighted cells below.
In such a case, opt for the Series – 4 option. Else, don’t bother. Put your money to better use — get started on that emergency fund or make an extra payment against your loan’s principal.
Contrarian to what everyone else’s saying?
Note: Published this post ahead of its schedule given the issue closing date.
Timely advice. Thanks Vinaya.
A note: I read that the min investment is Rs. 10,000/-.
Good to hear from you again. :-) And thanks for that note. The minimum investment amount is indeed Rs 10,000. Makes Row #1 of the table irrelevant.
Per the comments above, please ignore Row #1 of the table.
I also want to invest in IDFC Infrastructure bonds but I wont have any Demat account. Kindly guide me and suggest me the way of investing in Infra bonds
A Demat account is mandatory for investing in the IDFC Infrastructure Bonds since these bonds will ultimately be listed on the stock exchanges. So, without that Demat account you won’t be able to invest in these bonds.
I read that the issue closing date has been pushed to October 22, 2010. Do you think you’ll be able to open a Demat account in this time?
Now a Demat Account is NOT MANDATORY for investing in the IDFC Infrastructure Bonds..If Want to invest this bonds then you should submit following documents :-
(1 ). Photo Copy Of PAN Card
(2). Photo copy Of Address Proof
(3). One ” CANCEL” Cheque For ECS Payment..
Issue Closing dtae has been pushed to 22/10/2010…
Keep it up..
Thanks for posting this information as it will be very much helpful for a person like me who wants to invest in Infra bonds without demat account.
Keep investing fast now
Thanks for sharing the update. But do you know where it’s mentioned that a Demat account is not required. I checked @ http://www.idfc.com/infrastructure_bonds.htm and it still says that a Demat account is required. Couldn’t find any update on Google News as well.
Pl read this links
Even I got an email from a investment company that DEMAT a/c is not required.
Vinaya and all-
Correct me if I am wrong!
I feel their is a lock-in period of 10 years for these infrastructure bonds?
No. The bonds will be listed on NSE and BSE and can be traded after the 5 year lock-in period. The Series 3 and Series 4 options also come with a buyback clause.
You say that series 4 is better. But, the returns on series 4 are less than that on series 2.
Could you explain?
Another thing is you can invest through fundsindia.com too. I’m one of the investors for fundsindia.com . It’s one of the best ways to invest in mutual funds/bonds/fixed deposits through online as it does not charge any brokerage rate.
I think you can invest through Bajaj Capital too.
I recommend Series 4 primarily because it has a buyback option. Though the bonds will be listed on the NSE and BSE, given the status of the retail bond market today, I’m not sure if these bonds can be readily sold upon listing. The buyback clause gives you an additional degree of financial flexibility.
Can i invest in the bond after 22nd Oct 2010.
No. You’ll need to wait for five years for the bonds to get listed on the stock exchanges. Then you can buy them.
If i buy the bonds in physical form, than how can i sell those after 5 yrs on stock exchange.
Simple. Open a Demat account. Submit the physical certificates for conversion to electronic format. You can do this at any time — no need to wait for the bonds to get listed.
Opening of D-Mat account
Investment in Infrastructure Bonds
Returns from Infrastructure Bonds
Exit from Infrastructure Bonds
Benefits of Infrastructure bonds
Good advice. The calculations were making my head reel! Also seems more beneficial to the 30% tax category.
Found this discussion about the bonds at
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