Rural Electrification Corporation Ltd Rec Bonds
- About REC bond
- Why should you choose the REC while applied in 54EC bonds
- Features of Rural electrification corporation bond
About REC bond
Rural Electrification Corporation Ltd was established in 1969 to address the demands of the power sector. REC provides financial assistance to the segments of the power sector- be it generation, distribution, or transmission to the state electricity boards, state government, and to the rural cooperative. It is a NAVRATNA public sector company administered by the Ministry of Power.
REC extends their arm to provide loan assistance to the State electricity boards, state power utilities to invest in the rural electrification schemes via the corporate office situated in New Delhi and from other 20 branch units located in the different states. REC funds their business from the market borrowings with different maturity periods which include bonds and term loans in addition to the foreign borrowings.
Why should you choose the REC while applied in 54EC bonds
Rural electrification Corporation Ltd has the objective to promote and finance varied power generation, distribution, and transmission projects. REC is appointed as a central agency by the Government of India to implement Saubhagya- Pradhanmantri Sahaj Bijli har Ghar Yojna and DDUGJY- Deendayal Upadhyaya Gram Jyoti Yojna schemes. Both these schemes aim to provide 24x7 affordable electricity to every household in the country.
- Rural electrification corporation bonds are AAA-rated 54EC bonds. Therefore to invest in REC bonds online are safe and secure.
- The interest on REC 54ec bonds is taxable. No TDS deduction on the interest rate and free from wealth tax as well.
- Rural electrification bond comes with a lock-in period of 5 years non-transferrable.
- REC bonds interest rate is 5% and it is paid annually.
- REC tax-free bonds are backed by the Government of India; hence the risk factor associated with the rural electrification corporation limited bonds is minimal.
Features of Rural electrification corporation bond
Things to remember while investing in Rural electrification corporation bond
- Minimum REC bond investment is ₹10,000 for 2 bonds and maximum investment is ₹50,00,000 during a financial year.
- In case an investor does not have any demat account , the investor will receive a physical bond certificate similar to a fixed deposit.
- 5% PA is paid every year on 30th June until the redemption and the balance is paid to the investor along with redemption on the expiry date of the REC bonds.
- 5 years lock-in period. Non-transferrable and premature exit from the REC bonds is not allowed.
How to subscribe to the REC bonds?
To apply for a REC bond, you will have to
- Download the REC Bonds application form.
- Fill the application with the required details.
- Draw a cheque or demand draft in the name of- "REC Ltd- 54EC" or "Rural Electrification Corporation Limited - 54EC Bonds" and crossed “Account payee only”.
- Courier the form to us at below address along with copy of your PAN card, Cancelled Cheque and Address proof.
Mutual Funds Department
Asit C. Mehta Investment Interrmediates Ltd.
Nucleus House, Saki Vihar Road, Andheri (E), 400072