REC Tax-Free 8.71% 2027

TopFund Analysis

This bond yields 6.1% to maturity. AAA is the highest domestic credit rating a corporate/PSU bond can carry, indicating the lowest relative default risk in that category for REC Limited — though "lowest relative risk" isn't "zero risk," especially over its remaining 0.5 years. On a face value of ₹1000, the 8.71% coupon works out to roughly ₹87.1 a year, paid annually — before any tax on that income. As a tax-free bond, the coupon income itself is exempt from income tax under Section 10(15) — that's the main reason its headline coupon rate is usually lower than a comparable taxable bond; compare post-tax yields, not just the sticker rate, when weighing this against a taxable alternative.