Bonds are a good investment for NRBs

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Non-resident Bangladeshis (NRBs) seeking better yields than banks can invest in specialized government-offered bonds and stock market initial public offerings (IPOs).

One is the Wage-Earner Development Bond, which has a face value of Tk 25,000 and a term of five years, the completion of which earns 12 percent interest. No tax is payable on this income.

However, premature collection results in a lower interest rate.

Once automatically renewable, the bond can be purchased from authorized dealer branches of any bank in Bangladesh and the country’s embassies around the world.

This bond also offers up to 30 to 50 percent of the investment in the form of risk of death benefit. However, only people under the age of 55 are eligible for coverage.

The surety can also be presented as collateral when using loans from Bangladeshi banks.

Another option for NRBs is the US dollar investment bond, with a face value of $ 500 and a term of three years, the completion of which earns 6.5% interest. This too does not require any income tax payment. The bond can be purchased from any planned bank. It also offers death risk benefits of 15-25%, or up to Tk 20 lakh, and can be mortgaged for bank loans.

The same risk of death guarantees are available in a third option, the US dollar premium bond, which offers an interest rate of 7.5 percent.

Previously, NRBs could invest a maximum of Tk 50 lakh separately in the three bonds.

According to a new guideline, a maximum of Tk 1 crore or its equivalent in foreign currency can now be invested in all three.

Apart from this, some private banks also offer special bonds for NRBs which have high yields.

In the event of a stock exchange, NRBs can benefit from a 5 percent quota in IPOs from this month, which was previously 10 percent.

In the IPO process, companies do IPOs, or in other words, offer stocks to investors through a lottery.

During the IPO, the shares are offered at a minimum price, which is therefore lucrative for all equity investors. The special quota was aimed at attracting NRBs to the market. They can also invest in the secondary stock market, but this environment is currently volatile, requiring the realization of risks and potentials first before investing any money.

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