Bharat Bond ETF: Who and How Should One Invest?

Bond ETFs are favoured over other debt products because of low fees as well as high liquidity attribute. Once again investors interested in the investment option can park in their surplus funds into the offer which is open from July 14 to July 17.

The Rs. 14000 crore issue will be put for increasing the capacity of PSUs including the likes of Power Grid Corporation, National Housing Bank, REC, HPCL, NTPC and HUDCO etc.

Bharat Bond ETF: Who and How Should One Invest?

How To Invest In Bharat Bond ETF?

While for investment in any of the ETF, having a demat account is a primary requirement. There is still a choice if one doesn't has a demat account that is investment can be made via the fund of fund system.

Who Should Invest In Bharat Bond ETF?

These as per investment experts can be lapped by high net worth or rich individuals with income of over Rs. 10 lakh, looking for tax-efficient as well as high liquidity investment options. Bharat Bond works well for those in high tax brackets and whose annual income exceeds 10 lakh a year. It gives you liquidity and tax-efficient returns," said Anil Chopra, group director - financial wellbeing, Bajaj Capital.

Investment in Bharat Bond ETF Can Be Targeted For Long Term Goals

Since the investment has a targeted maturity being available in 2 maturities i.e. the two target maturity dates are April 2025 i.e. after 5 years or April 2031 i.e. a period of 11 years. and there is certainty in returns, investors can deploy funds in the avenue targeting long term goals such as children's education or marriage.

Also, investors need to deploy just 10% of their total financial bet on debt product including other avenues such as PPF, debt mutual funds etc.

Tax efficient investment in Bharat Bond ETF

Taxation wise also the product is tax efficient with minimal tax implication in a case if the product is held till maturity then long term capital gains tax of 20% with indexation benefit applies that significantly reduces tax liability and hence increases one's return.

Investment in the product is also highly safe as the sum mopped up is invested in securities of top rated government bonds.

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