Of the 4 instruments on offer, the Tax Saving Bond with Section 88 benefit (20 per cent tax rebate) is the best option. The added incentive is that ICICI will ensure full and firm allotment to all valid applicants for the Tax Saving Bond. Like in the November issue of Safety Bonds, the latest offering from ICICI also has the Zero Coupon Bond with Section 88 benefit. The bond will be issued at a discount (Rs 5000) to its face value (Rs 7359); thedifference will be given on maturity.

Although the bond gives a high yield because of the Section 88 benefit, the tax treatment of the maturity amount (as interest income) renders it relatively unattractive. Those wishing to avail of capital gains tax benefit can choose option III and IV of the Tax Saving Bond.

Interestingly, the Regular Income Bond has a monthly option. This would be beneficial to those who want a steady flow of income. However, as the administrative cost of the monthly interest payment is high, the minimum application is Rs 15,000 as against Rs 5,000 for the annual option. So far as yields are concerned, both the annual and monthly option are equally good with a YTM of 13.8 per cent. Avoid, the half-yearly option as it has a lower yield.

On the other hand, the Money Multiplier Bond is attractive so far as yields are concerned. Investors can double their money in five years and four months which gives a better yield than the National Saving Certificate scheme where money doubles in sixyears. If you're willing to wait for a longer period, you can get an yield of 14.1 per cent (i.e., your investment becoming 25 times in 24 years and five months). But again, the tax treatment of the maturity amount (as interest income) has taken the sheen out of deep discount bonds.

The Encash Bond is a good investment opportunity for those generally opting for short-term bank deposits. The interest offered by ICICI is higher than most public sector banks' one-year deposit. Most PSU banks offer 10-10.5 per cent for one year. However, the bond is not so attractive when compared with private banks or MNC banks who offer higher rates of around 11.5-12 per cent. The only difference is that the minimum investible amount is much lower in the Encash Bond (Rs 5,000) as against Rs 15,000-20000 charged by most private and MNC banks.

For those holding on to their Encash Bond for a longer period, there is a bonanza in the form of higher rates of 16 per cent and 18 per cent for the fourth and fifth year, respectively.The easy liquidity is, of course, another carrot.

ICICI seems to be living up to its promise of being in the market the whole year through. So far, the institution has already tapped the public four times -- in April, July, August and October. Through these issues ICICI has mopped up Rs 1743.5 out of the total target of Rs 3000. This means ICICI would be tapping the market at least twice depending on the response to the present issue. With more issues from ICICI and other institutions lined up before the close the financial year, investors will have a wider choice. So, it makes sense for them to wait and check out the other offerings before taking a plunge now. With interest rates not likely to go down in the near future, they have nothing to lose.