RBI bonds are savings bonds issued by Reserve Bank of India and any resident Indian can purchase RBI bonds as an investment. Both induviduals and HUF can invest in RBI bonds. RBI bonds get mature after 7 years from the date of issuance. The minum investment amount is INR 1000 and there is no maximum limit for the investment in RBI bonds.
RBI bonds are ideal for investors who would like to get more return on investment as compared to bank fixed deposist without any risks. RBI bonds investments will get mature only after 7 years and premature withdrawal option is available only to citizens who age falls between 60-70 and 70 -80 age groups. The premature withdrawal of RBI bonds attracts 50% of interest due to the investor for last six months of RBI bonds holding period.
A Mutual Fund is a trust that pools the savings of investors who share a common financial goal. The corpus of the fund is then deployed in investment alternatives to meet predefined investment objectives of the mutual fund scheme. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them.