G-Sec Query (Interest calculation, Payment, Maturity)

Bonds
1

I have purchased G-Sec for first time, hence seeking more clarity about its Interest Payment, Maturity etc.
the security is : 817GS2044-GS

Have below queries

  1. Interest Calculation: How its return are calculated and how much interest would be accrued on it?
  2. Interest Payment: I am aware that the Interest is paid semi annually, is there any specific date of Payment?
  3. Maturity: What happens at maturity exactly? How much money is redeemed? is the redemption automatic or we need to sell it?

Thanks.

2

  1. Gsec interest is based on coupon rate and face value. For your case coupon is 8.17%. and face value is 100. So you will be getting Rs. 4.085 as interest per bond every six months.

  2. Yes each bond has specific dates for interest payment. Shubh maintains a good list of it
    Interest payment dates for government bonds (G-Sec)
    Bond you hold shows 1 Dec and 1 June of every year.

  3. At maturity face value is redeemed and paid back. SO for each bond you hold you should be getting Rs. 100 back + Rs. 4.085 as interest for last 6 months.
    Yes redemption is automatic if you hold till maturity. Units will be extinguished from demat and you will get money credited in your bank account.

Important to note that both interest and redemption are dependent on face value of bond and is not dependent on price you paid for buying the bonds.
Hope this helps.