HUDCO Tax-Free Bonds

I rarely recommend specific financial products as I prefer to put up evergreen content on my blog.However 20 years is a fair length of time and so this recommendation.

I unreservedly recommend the HUDCO Tax-Free bonds Tranche-II,tenure 20 years, for retail investors.The bonds offer 9.01% interest,paid out annually.The interest is not taxable.So it won’t be clubbed with your future income and taxed.

In these inflationary times,there is the fear that the returns from fixed income instruments will not keep up with inflation.However,India s a functioning democracy and inflation does not remain high for decades on end.Witness yesterday’s results from assembly elections in 4 states.Governments pay for the distress caused by price rise.So,if you hold these bonds to maturity you won’t do badly.

Also being a government concern you can be sure of being paid back the interest and capital after 2 decades.

Lastly as the bonds tradable,you have the chance of withdrawing your capital in case of urgent need.