Government Bonds

Modelled on RBI Floating Rate Savings Bonds / retail G-Secs: a fixed coupon paid semi-annually. Unlike a bank FD (which usually compounds quarterly), this assumes semi-annual reinvestment of each coupon at the same rate — real RBI bonds actually pay coupons out rather than auto-compounding them, so treat this as 'what it could grow to if you reinvested every payout,' not what the bond itself does automatically.

Bond interest is fully taxable at your marginal slab every year it's paid, exactly like FD interest — there's no LTCG concession and no TDS threshold exemption the way bank deposits sometimes get. Government backing means credit risk is effectively zero, but that safety isn't tax-advantaged.