Bonds good investment for NRBs
Non-resident Bangladeshis (NRBs) seeking better returns than those of banks can invest in specialised bonds offered by the government and initial public offerings (IPO) of the stock market.
One is the Wage-Earner Development Bond, which has a face value of Tk 25,000 and a tenure of five years, completion of which yields 12 per cent interest. No tax needs to be paid for this income.
Premature encashment, however, results in a lower interest rate.
Once auto renewable, the bond can be bought from authorised dealer branches of any bank in Bangladesh and the country's embassies around the world.
This bond also offers up to 30 to 50 per cent of the investment as death risk benefit. However, only those below the age of 55 are eligible for coverage.
The bond can also be shown as security when availing loans from Bangladeshi banks.
Another option for the NRBs is the US Dollar Investment Bond, which has a face value of $500 and tenure of three years, completion of which yields 6.5 per cent as interest. This too requires no income tax payment. The bond can be purchased from any scheduled bank. It also offers death risk benefits of 15 per cent to 25 per cent, or up to Tk 20 lakh, and can be mortgaged to avail loans from banks.
The same death risk benefits are available in a third option, the US Dollar Premium Bond, which offers an interest rate of 7.5 per cent.
Earlier, the NRBs could invest a maximum of Tk 50 lakh separately in the three bonds.
According to a new guideline, now a maximum of Tk 1 crore or its equivalent in foreign currency can be invested in the three altogether.
Apart from these, some private banks also offer special bonds for the NRBs which have high returns.
In case of the stock market, the NRBs can avail a 5 per cent quota in IPOs from this month, which was previously 10 per cent.
In the process of getting listed in the stock market, companies make IPOs, or in other words, offer shares to investors through lottery.
In the IPO, the shares are offered at a minimum price, so it is lucrative for all stock investors. The special quota was aimed at attracting NRBs to the market. They can invest in the secondary stock market as well but that environment is currently volatile, which first necessitates the realisation of risks and potentials before any money is invested.
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