What is the interest rate for SDL investments?
Interest rates on State Development Loans (SDLs) are not fixed and are determined through regular auctions conducted by the Reserve Bank of India (RBI). These rates depend on multiple variables such as the issuing state, the bond's maturity, and current market conditions.
How SDL interest rates are set?
- RBI auctions: SDLs are issued by state governments through biweekly auctions supervised by the RBI.
- Market-driven: Interest rates (or coupon rates) are derived based on investor demand, the state’s credit profile, and maturity period.
- Comparative yield: SDLs generally offer slightly higher returns than central government securities to account for increased credit risk.
Sample SDL rates
| Security | Maturity date | Interest rate |
|---|
| 7.42% ANDHRA SDL 2031 | 14 Sep 2031 | 7.42% |
| 7.16% KARNATAKA SDL 2030 | 08 Jan 2030 | 7.16% |
| 8.26% GUJARAT SDL 2031 | 13 Jan 2031 | 8.26% |
Note: These rates are indicative and subject to change.
What if...
| Scenario | Resolution |
|---|
| You want real-time SDL rates | Visit the RBI website or check bond listings on the NSE platform. |
| Interest rate seems unusually high or low | Review the auction result details and cross-check with bond tenure and credit environment. |
Higher SDL interest rates often indicate longer tenures or lower demand during auctions. Compare similar maturity G-Secs for context before investing.
Last updated: 26 Jun 2025
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