Feature | Inflation-Indexed Bonds (IIBs) | Capital Indexed Bonds (CIBs) |
---|---|---|
Example Principal | ₹10,000 | ₹10,000 |
Annual Interest Rate | 5% | 5% |
Inflation Rate | 3% | 3% |
Adjusted Principal | ₹10,300 (₹10,000 * 1.03) | ₹10,300 (₹10,000 * 1.03) |
Interest Payment | ₹515 (5% of ₹10,300) | ₹500 (5% of ₹10,000) |
Principal & Interest Both Adjusted? | Yes | No |
Indexed To | A Price Index | A Price Index |
Suitable For | Complete inflation protection for principal and interest | Inflation protection for principal only |
Feature | Inflation-Indexed Bonds (IIBs) | Capital Indexed Bonds (CIBs) |
---|---|---|
Protection | Principal + Interest | Only Principal |
Interest Payment | ₹515 (5% of ₹10,300 ) | ₹500 (5% of ₹10,000) |
Adjustment | Both Principal and Interest | Only Principal |
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