The crash of US-64 made many of us lose faith in government wealth management schemes. Also low government bonds interest rate make us wonder why would anyone like to put their hard earned money into government savings bonds or regular government bonds for purpose of investment. Security and assured returns are main reasons why one purchases government bond despite lesser government bond rates as compared to schemes offered by other commercial institution.

In order to give stiff competition to other institutions, government savings bonds schemes are being launched in the market at attractive government bond rates. For example, one can invest in Relief RBI government bond scheme which comes with an attractive government bonds interest rate of 8%. If you too are looking for safe investment schemes and are eager to learn more about different government bonds and government bonds interest rate read on the following section of Money Super Bazaar.

What you must know about government bonds

First thing to be observed about government bond is that they have a fixed maturity date. Government savings bonds and other government bonds can have a maturity date which can range from just some days to even 30 years. Depending on the maturity term, government bonds can be described as short term government bond and long term government savings bonds.

Government bond has a fixed face value which represents the money which the investor will get when the government bonds mature. Generally the government bonds are issued for a minimum face value of Rs 10,000 and then the values increases in the multiples of 10,000 Rs. Government savings bonds are issued through an auction which is carried out usually by RBI. Banks are one of the biggest investors in government bonds. The money which is earned by the investors using government bond is through capital gains or in type of coupon payments.

Government bonds interest rates Risks

There is a nagging fear in the mind of investors about the risks associated with the changing government bond rates. If there is sudden surge in the government bonds interest rate then the prices of the bond will drop and investors would try selling off these government bonds which will result in capital loss. On the other hand if government bond rates drop then the investors could enjoy benefits by selling government bond at higher rate.

As of 2009 special floating rates government bond have been introduced by the government where government bond rates will be calculated by taking into account variable base rate.

Using this information about government bonds interest rate and government savings bonds from Money Super Bazaar you are now prepared to make investments.