What is the minimum and maximum investment limit in the RBI Floating Rate Bonds?

Minimum ₹1,000/- and in multiples of ₹1,000/- thereafter. There is no maximum limit.

What is the tenure (maturity period) of the RBI Floating Rate Bonds?

These bonds come with a 7-year tenure from the date of issue. After maturity, no interest is paid. Premature redemption is allowed for investors aged 60 and above, as per RBI Notification.

What is the interest pay-out date of floating rate bonds?

Interest is payable semi-annually. It is paid on 1st July and 1st January for the half-year periods ending 30th June and 31st December, respectively.

What is the Rate of Interest in RBI Floating Rate Bonds?

The current interest rate is 8.05%, reset semi-annually on January 1st and July 1st. It is linked to the prevailing National Savings Certificate (NSC) rate with a 35 basis point spread.

Is the interest earned from floating rate bonds taxable?

Yes, the interest income is taxable. TDS is deducted at the time of interest payment as per Income Tax regulations.

RBI Floating Rate Bonds - Advantages & Interest Rate

Why Invest in RBI Floating Rate Bonds?

Investment that is completely risk-free

Floating Interest Rate

Interest payable semi-annually in Jan & Jul each year

Maximum Investment - There Is No Limit

Maturity is 7 years from Investment date.
Premature withdrawal for Senior Citizens*

Attractive ROI of 8.05%

Bonds will always pay 0.35% more than NSC rates

Minimum Investment - Rs. 1000 (and in multiples thereof)

Nomination Facility Available

Not Tradable & not Transferable

Eligibility Criteria for RBI Floating Rate Bonds

RBI Floating Rate Bonds are a secure investment option backed by the Government of India, available exclusively to individual investors aged 18 years and above, as well as Hindu Undivided Families (HUFs). These bonds can be purchased with a minimum investment of just ₹1,000, and there is no maximum investment limit, making them accessible to both small and large investors.

Taxation of RBI Floating Rate Bond

For investors looking to understand the taxation on RBI Floating Rate Bonds, it's important to know that while these bonds offer government-backed security and regular interest payouts, the interest income is fully taxable as per the investor's applicable income tax slab rate. For all the customers Tax Deducted at Source (TDS) will be deducted.

Prematurity Withdrawal

The bonds will be repayable after the completion of 7 years. premature withdrawal is allowed only for those whose age is 60 years and above subject to the submission of documents relating to the date of birth proof.
Facility is available to the eligible investors after Lock in period of 4, 5, and 6 years in the age bracket of 80 years and above, between 70 to 80 years and 60 to 70 years respectively
Penalty charges @ 50% of last coupon payment

Age Group	Lock-in period
60 - 70 Years	6 Years
70 - 80 Years	5 Years
Beyond 80 Years	4 Years

Documents Required

Duly filled in application form (Complete application form,duly filled in from the investors).
Self attested PAN card copy of the investor.
Self attested Address copy of the investor.
Cancelled Cheque leaf of the bank which was mentioned in application for interest and maturity payments.
No correction / alteration allowed in the application and the corrections if any to be duly authenticated by the investor.

Duly filled in application form (Complete application form, duly filled in by the Karta with stamp and sign).
Self attested PAN card copy of the HUF.
Self attested Address copy of the HUF.
Cancelled cheque leaf of the bank which was mentioned in application for interest and maturity payments.
No correction / alteration allowed in the application and the corrections if any to be duly authenticated by the Karta.
List of coparceners in the Hindu Undivided Family along with their signatures attested by Karta.

Duly filled in application form (Complete application form,duly filled in from the Guardian).
Self attested PAN card copy of the minor / Guardian.
Self attested Address copy of the minor / Guardian.
Birth Certificate of the minor attested by the Guardian.
Cancelled Cheque leaf of the bank which was mentioned in application for interest and maturity payments.
No correction / alteration allowed in the application and the corrections if any to be duly authenticated by the investor.
In case of POA, Original POA to be verified by the bank and certified as "Original Seen and Verified".

For RBI Floating Rate Bonds Scheme Details, click here

Frequently Asked Questions (FAQs)

Minimum ₹ 1000/- and in multiples of ₹ 1000/- thereafter and there is no maximum limit.

These bonds come up with a 7-years of tenure from the date of issue. After the bond matures, no interest will be paid. Premature redemption is permitted for investors aged 60 and up, according to the RBI Notification.

Interest is payable semi-annually from the date of bond issuance until the 30th June / 31st December, as applicable, and then half-yearly for periods ending on the 30th June and 31st December on the 1st July and 1st January, respectively.

The current rate of interest is 8.05% and subject to re-set half yearly every Jan 1st & July 1st, and will be compared to the prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 basis points over the respective NSC rate. All future coupons would be reset based on the NSC rate of interest fixation on January 1 and July 1.

The interest income earned from these bonds is taxable. TDS (Tax Deducted at Source) is deducted at the time of interest payment in accordance with IT regulations.

These bonds cannot be used as collateral for loans from banks, financial institutions, or non-banking companies.

Blogs

Understanding RBI Floating Rate Bonds: Impact of NSC Interest Rate Hike on Returns

04 April, 2023

06 April, 2023

27 jun, 2023

Authorised Arrangers

RR is an authorised marketing associate for RBI Floating Rate Bonds since their inception. RR is also among the top mobilizers of bonds in India. We have a pan-India presence through our network and offices.

RBI Floating Rate Bonds 2020

(Taxable)