The RBI Floating Rate Savings Bond
The Floating Rate Savings Bonds, 2020 (Taxable) — often just called "RBI bonds" — are issued by the Government of India through the RBI. Their rate is reset every six months:
For 1 July – 31 December 2026 the rate is 8.05% (NSC 7.7% + 0.35%), as the RBI announced. The rate for January–June 2027 will follow from the NSC rate the government sets for that quarter.
| Feature | Detail |
|---|---|
| Tenure | 7 years |
| Minimum | ₹1,000, no maximum |
| Interest | Paid every 6 months (1 Jan and 1 Jul); no cumulative option |
| Who can buy | Resident individuals and HUFs (not NRIs) |
| Early exit | Only for senior citizens: after 6 years (age 60–70), 5 years (70–80) or 4 years (80+), with a penalty of half the last six months' interest |
| Transfer or trade | Not allowed |
| Tax | Interest taxed at your slab rate; TDS applies |
You can buy them at the agency banks' branches (SBI, the nationalised banks and some private banks) and, at several banks, through net banking.
Who it suits
Retired people and others who want regular, government-backed income that rises if rates rise — and who don't need the money for seven years. Since the interest is paid out, not compounded, it suits income needs more than growth.
Other floating rate bonds
- Government FRBs — G-secs whose coupon is linked to treasury bill yields, bought through RBI Retail Direct.
- Corporate floaters — company bonds linked to the repo rate or T-bill yields; they carry the company's credit risk.
- Floater debt funds — mutual funds that hold mostly floating rate papers (debt mutual funds).
For general information only, not investment advice or a recommendation. Oxon Fintech is a loan facilitation platform, not a SEBI-registered investment adviser, bank or mutual fund distributor, and does not sell bonds, deposits or funds. Rates and rules are as checked on the date above; confirm with the issuer, bank or fund house before investing. Mutual fund investments are subject to market risks; read all scheme-related documents carefully.