Ask investors whether SBI bonds are safe, and the usual answer is, “It’s the government’s bank, so it must be as good as a sovereign.” That deserves a closer look. CRISIL rates SBI’s infrastructure and Tier II bonds AAA, but its Additional Tier 1 (AT1) bonds sit a notch lower at AA+. The reason is that AT1 bonds can lose their coupons or principal. This guide explains the main types of SBI bonds in India, what they pay, how they’re rated, and where the risks sit. That way you choose by structure, not by the SBI name.
Start investing with just ₹10K & grow your wealth with fixed return opportunities.
Invest Now
Who Issues SBI Bonds?
An SBI bond is a loan you give to State Bank of India or, less often, to a group company. You earn a coupon (the interest rate) and get your principal back at maturity. SBI absorbed its associate banks in 2017, but the SBI bonds CRISIL rates today are all SBI’s own issues. Group companies are separate borrowers.
Government-Owned Is Not Government-Guaranteed
The government held 55.03% of SBI on March 31, 2026 [1], and CRISIL’s ratings lean partly on strong expected support from it, which CRISIL describes as a moral obligation that comes with majority ownership. That’s a reasonable expectation, but it isn’t a promise written into the bond. Think of a rich owner of a family business: lenders expect the owner to step in during a crisis, but the owner hasn’t signed a guarantee. The bank’s own strength matters too. Its standalone gross NPAs were 1.49%, and its overall capital adequacy ratio was 15.4% as of March 2026 [2].
SBI Bond Types Compared: Coupon, Rating, and Risk
Coupons are fixed at issue, while trading yields move daily. For context, the 2036 and 2041 government bonds yielded 7.45% and 7.62% on October 27, 2026, so SBI bonds with lower coupons are likely to trade below face value. Check live prices before you buy.
| Instrument | Issuer | Coupon (at issue) | Rating | Key catch |
| Infrastructure bonds | SBI | 7.23%–7.36% (2024 issues, due 2039) | AAA | Long tenure; prices fall if rates rise |
| Tier 2 bonds | SBI | 6.93%–7.81% (2023–26 issues) | AAA | Subordinated; PONV risk; large ticket sizes |
| AT1 bonds | SBI | 7.55%–8.34% (series outstanding in July 2026); 7.75% (July 2026 issue) | AA+ | Perpetual; the coupon can be skipped; QIB-only |
| NCDs | SBI Cards | 7.05% (July 2025, due 2028) | AAA | Unsecured card book; support isn’t a guarantee. |
SBI Infrastructure Bonds
These are plain, senior, unsecured bonds. RBI’s rules require a minimum seven-year maturity, and in return they get relief from CRR and SLR requirements on the eligible credit. They carry no write-down clause. CRISIL rates ₹10,000 crore of SBI’s infrastructure bonds AAA/Stable.
SBI regularly issues infrastructure bonds to raise long-term funds for infrastructure and affordable housing. In July 2024, it raised ₹10,000 crore through a 15-year issue carrying a 7.36% annual coupon. Its seventh infrastructure bond issue, in November 2024, raised another ₹10,000 crore for 15 years at a 7.23% coupon.
Latest Bonds Updates:
- Guaranteed Bonds in India: How They Work, Key Risks, and What to Check
- Patna Municipal Bonds: ₹200 Crore Raise Marks Bihar’s Debut in India’s Civic Debt Market
- Foreign Holdings of India’s Index-Linked Bonds Hit 4-Month Low as Oil and Rate Fears Mount
SBI Tier 2 Bonds
Tier 2 bonds count as regulatory capital, so holders rank behind depositors and senior bondholders. CRISIL rates SBI’s Tier II program (about ₹34,800 crore) AAA. It notes a point-of-non-viability (PONV) trigger, set by the RBI, that could cost investors principal, though CRISIL calls that remote in India.
Recent coupons include 7.81% on a ₹10,000 crore issue from November 2023, 7.33% from September 2024, and 7.05% from March 2026. A ₹7,500 crore series from October 2025 pays 6.93% and is due in 2035. Ticket sizes vary: the 2020 series has a ₹10 lakh face value, while a 2024 series has ₹1 crore. Check the face value and call terms before you commit.
SBI AT1 Bonds
AT1 bonds are equity-like risk in a debt wrapper. SBI is a heavy issuer: CRISIL’s July 2026 list showed nine AT1 series issued between 2021 and 2024 alone. The features that matter:
- Perpetual: There’s no maturity date, only a call option the bank may or may not use. Coupons on those nine series range from 7.55% to 8.34%.
- Cancellable coupons: The bank has discretion over coupons at all times, and a breach of the minimum CET1 capital ratio can stop payments.
- Write-down risk: Principal can be written down if a preset capital trigger is breached. At the point of non-viability, the RBI is required to write the bonds down.
- Lower rating: CRISIL marks AT1 down one notch from the bank’s corporate rating to AA+ and warns that its rating can move faster than for Tier II.
- Restricted access: Only qualified institutional buyers can take part in new AT1 issues, with a ₹1 crore minimum allotment and trading lot.
A call is the bank’s choice, not a promise, though SBI has recently used it. It redeemed a ₹4,000 crore, 7.72% series in full on September 3, 2026. It also called a ₹6,000 crore, 7.72% series, payable on October 17, 2026, with RBI permission. A ₹3,974 crore, 7.55% series is lined up for a call on December 14. In July 2026, SBI sold ₹4,691 crore of new AT1 at 7.75%, with a first call date of July 30, 2031.
The cautionary tale is Yes Bank. In March 2020, the bank’s administrator wrote down ₹8,415 crore of its AT1 bonds during the rescue. The Bombay High Court set that aside in January 2023, and on October 15, 2026, the Supreme Court upheld the High Court, holding that the administrator had acted beyond his authority. SBI is far stronger, but the structure is the same.
SBI Cards NCDs
SBI Cards and Payment Services is a credit card company, and its bonds are its own liabilities, not SBI’s. CRISIL reported SBI’s 68.6% stake as of June 2025 and reaffirmed its AAA/Stable rating in November 2025, citing expected support from SBI [3]. The shared brand creates a moral obligation to support the company, but not a guarantee. A downgrade of SBI or its stake falling below 50% could trigger a similar rating action.
The company’s loan book is entirely unsecured, but gross NPAs improved to 1.90% in September 2026, from 2.85% a year earlier [4]. In July 2025, SBI Cards issued ₹2,000 crore of NCDs at a 7.05% coupon, maturing in July 2028. Its 2024 Lower Tier II bonds carried coupons of 8.25%–8.33%; these are historical coupon rates on different instruments, not current market yields.
How to Buy SBI Bonds in India and How They’re Taxed
You can buy listed bonds through a demat account or a SEBI-regulated online bond platform. SEBI allowed face values as low as ₹10,000 on private placements in July 2024, but SBI’s own bonds tend to be larger, as the ₹1 lakh and ₹1 crore examples above show. Check trading volumes too, since thin liquidity widens the gap between buy and sell prices.
You can also compare similar options and browse AAA-rated bank and NBFC NCDs on GoldenPi and check the coupon, tenure, and rating side by side before you invest.
On tax, coupons are taxed at your slab rate, and gains on a listed bond sold after 12 months face long-term capital gains tax at 12.5%. Unlisted bonds are taxed at slab rates regardless of holding period. Unlike FDs, bonds don’t get deposit insurance: DICGC cover is ₹5 lakh per depositor per bank, and RBI’s rules say infrastructure bonds aren’t eligible for it.
Which SBI Bond Fits You?
If you want predictable income and can hold to maturity, senior infrastructure bonds are the cleanest fit. Tier 2 suits investors who have read the PONV clause, though ticket sizes can be large. AT1 is institutional territory, and for fresh issues, most readers have no access anyway. Judge SBI Cards’ NCDs as NBFC credit. Want to compare similar options? Browse AAA-rated bank and NBFC NCDs on GoldenPi and check the coupon, tenure, and rating side by side before you invest. Whatever you pick, read the offer document and confirm the latest rating.
SBI Bonds in India FAQs
The main categories include infrastructure bonds, long-term unsecured bonds, Tier II bonds, and AT1 bonds.
These are bonds issued by SBI under the applicable infrastructure-bond framework. They have specified coupon and maturity terms and may appeal to investors seeking contractual interest payments. The individual issue documents determine the precise terms and risks.
Do not assume they are secured merely because they are called infrastructure bonds. Check the issue documents for the security status, repayment ranking, guarantees, and other terms. Many SBI bond issues are unsecured.
SBI is majority-owned by the Government of India, and rating agencies may factor expected government support into their assessments. However, an SBI bond is not automatically a sovereign guarantee. Investors should check whether the specific instrument carries an explicit guarantee.
Yes. Selling a bond for more than its tax cost may result in a capital gain, while selling below cost may result in a loss. The applicable tax treatment depends on the instrument, acquisition and sale dates, holding period, and current law.
Look up the bond’s exact ISIN and check its latest available market price, accrued interest, coupon schedule, and maturity date. Use these details to assess its yield to maturity (YTM). If there is no recent trade or reliable price, the available yield estimate may be less useful.
Sources
- CRISIL Ratings — State Bank of India Rating Rationale, 24 July 2026
- SBI – Q4 FY2025–26 results
- CRISIL Ratings — SBI Cards and Payment Services Limited Rating Rationale, 14 November 2025
- SBI Card – Q2 FY2026–27 Financial Results
Disclaimer
Fixed returns do not constitute guaranteed or assured returns. Investments in corporate debt securities and municipal debt securities/securitized debt instruments are subject to credit risks, market risks, and default risks, including delay and/or default in payment. Read all the offer-related documents carefully. This blog/article should not be construed as financial advice or as an offer or recommendation to buy or sell any security or any products/services of/on GoldenPi or any product/services of its third-party client(s). For a detailed calculation of YTM, visit our website. T&C’s Apply.
