Tax-free bonds earn a fixed interest rate which is tax-free in the hands of investors

Tax-free bonds: 5 things to know

1.Tax-free bonds earn a fixed interest rate which is tax-free in the hands of investors.
2.These are issued by government entities like companies, municipal corporations, public sector undertakings and other infrastructure firms.
3.These are an effective tax-saving tool for investors who fall in higher tax brackets.
4.Investment can be made via brokers or banks. Bonds can be held in physical or demat form.
5.After Allotment, these bonds are listed on stock exchanges and can be traded on the exchange.

Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.

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This story originally appeared on: India Times - Author:Faqs of Insurances