- 8.05%Interest a yearNSC rate + 0.35%
- Every 6 monthsInterest paid1 January and 1 July
- ₹1,000MinimumNo maximum
- 7 yearsTermEarly exit only for 60+
What are RBI Floating Rate Savings Bonds?
RBI Floating Rate Savings Bonds are savings bonds of the Government of India. Their full name is the Floating Rate Savings Bonds, 2020 (Taxable), or FRSB 2020 (T). The government launched them on 1 July 2020, and RBI sells them through chosen banks. They are open all the time, so you can buy them on any working day.
"Floating" means the rate is not fixed. It is the National Savings Certificate (NSC) rate plus 0.35%, and it is checked every six months. You get interest twice a year, and your money comes back after 7 years.
- Step 1Invest once₹1,000 or more, in multiples of ₹1,000. No upper limit.
- Step 2Get interest every 6 monthsOn 1 January and 1 July, at the NSC rate + 0.35%.
- Step 3Get your money backAfter 7 years, straight into your bank account.
Example: Sunita, 48. She puts ₹5,00,000 in RBI Floating Rate Bonds at 8.05%. Every six months, interest comes into her bank account. After 7 years, her ₹5,00,000 comes back.
- Every 6 months
- ₹20,125
- In a year
- ₹40,250
- Interest in 7 years
- ₹2,81,750
These figures assume the rate stays at 8.05% for all 7 years.
RBI Floating Rate Bond interest rate 2026: 8.05%
The rate is 8.05% a year for 1 July 2026 to 31 December 2026. This interest is paid on 1 January 2027. It is the NSC rate of 7.7% for October to December 2026 plus 0.35%.
- Reset: the rate is set again on 1 January and 1 July every year, using the NSC rate in force on that date. The next reset is on 1 January 2027.
- Old and new investors get the same rate: unlike NSC or SCSS, the rate on the day you buy does not stay fixed. All bond holders get the new rate after each reset.
- Up or down: if the NSC rate falls, your interest falls too. Each 0.25% change moves the payment on ₹5,00,000 by about ₹625 every six months.
- How it is paid: straight into your bank account on 1 January and 1 July, or the next working day if that is a holiday. Days are counted as 30/360, so each half-year pays rate ÷ 2.
| Period | NSC rate | Bond rate |
|---|---|---|
| From July 2023 | 7.7% | 8.05% |
| From January 2023 | 7% | 7.35% |
| From July 2020 | 6.8% | 7.15% |
The first rate, paid on 1 January 2021, was 7.15%. See the NSC rate on the NSC interest rate page.
How much interest do RBI Floating Rate Bonds pay?
Interest at 8.05%, before tax, if the rate stays the same.
| Amount | Every 6 months | In a year | In 7 years |
|---|---|---|---|
| ₹10,000 | ₹403 | ₹805 | ₹5,635 |
| ₹1,00,000 | ₹4,025 | ₹8,050 | ₹56,350 |
| ₹5,00,000 | ₹20,125 | ₹40,250 | ₹2,81,750 |
| ₹10,00,000 | ₹40,250 | ₹80,500 | ₹5,63,500 |
| ₹25,00,000 | ₹1,00,625 | ₹2,01,250 | ₹14,08,750 |
| ₹50,00,000 | ₹2,01,250 | ₹4,02,500 | ₹28,17,500 |
For your own amount, tax and TDS, use the RBI Floating Rate Bond calculator.
RBI Floating Rate Bonds eligibility: who can invest?
- Yes: Resident Indian individuals
- Yes: Two or more resident individuals together, as a joint holding
- Yes: A parent or legal guardian on behalf of a minor
- Yes: Hindu Undivided Families (HUFs)
- No: NRIs (Non-Resident Indians)
- No: Companies, firms and trusts
There is no age limit for buying. The age rule matters only if you want to encash the bonds early (see below).
How to buy RBI Floating Rate Savings Bonds
- Step 1Choose a bank or RBI Retail DirectA chosen branch, the bank's net banking, or the RBI Retail Direct portal.
- Step 2Fill in the formThe application form (Form B) at the branch, or the online form.
- Step 3Give KYC and PANPAN, KYC documents and your bank account for interest.
- Step 4PayCash up to ₹20,000; more by cheque, draft or online transfer.
- Step 5Add a nomineeSo your family gets the bonds easily.
- Step 6Get the Certificate of HoldingYour bonds are held online in a Bond Ledger Account.
Banks that sell them: SBI, the nationalised banks, and IDBI Bank, Axis Bank, HDFC Bank and ICICI Bank, at their chosen branches. Many of these banks also sell them through net banking. Under RBI's guidelines of 2 April 2026, all these banks must offer online applications in 2026. You can also open a free account on RBI Retail Direct and buy the bonds there.
| Who | Documents |
|---|---|
| Everyone | Application form, PAN, KYC documents (such as Aadhaar), and bank account details for interest and repayment |
| No PAN | A declaration in Form 97, as RBI's guidelines allow |
| For a minor | The minor's details and the PAN of a parent or guardian if the minor has no PAN |
| Senior citizens | Proof of date of birth, needed later if you want to encash early |
RBI Floating Rate Bonds investment rules
- Amount: at least ₹1,000, in multiples of ₹1,000. There is no maximum.
- Form: the bonds are only electronic. They are kept in a Bond Ledger Account with the bank, and you get a Certificate of Holding as proof.
- Only six-monthly interest: there is no cumulative option. Interest is paid out, not added to the bond.
- Many purchases: you can buy again at any time. Each purchase is a separate holding with its own 7-year term.
- Cash: allowed only up to ₹20,000.
RBI Floating Rate Bonds premature withdrawal rules
Early encashment is allowed only for individual holders aged 60 or more. The lock-in counts from the date of issue, and your age is checked on the day you ask to encash.
| Age on the day you encash | Earliest exit | Charge on ₹10,00,000 | Interest received |
|---|---|---|---|
| 60 to 70 | After 6 years | ₹20,125 | ₹4,62,875 |
| 70 to 80 | After 5 years | ₹20,125 | ₹3,82,375 |
| 80 and above | After 4 years | ₹20,125 | ₹3,01,875 |
- You need to give proof of your date of birth to the bank.
- In a joint holding, at least one holder must meet the age rule on the day of encashment.
- If the holder has died, the lock-in is worked out from the age of the legal heir, not the nominee.
- You cannot encash only part of one purchase. The whole holding from one application is repaid.
- People under 60 cannot encash early. They must wait for 7 years.
RBI Floating Rate Bonds maturity
The bonds are repaid 7 years after the date of issue. The money goes straight into your bank account on record. No interest is paid after the maturity date. Interest for the last broken period (from the last payment date to maturity) is paid with the amount.
There is no extension. To keep investing, you buy new bonds at the rate then.
Nominee, death of the holder and transfer
- Step 1NomineeAdd nominees in Form C, with a share for each (at least ₹1,000 each). Change or cancel with Forms C and D.
- Step 2Who can be a nomineeA resident Indian or an NRI. An OCI cardholder cannot be a nominee.
- Step 3If the holder diesThe bonds go to the nominees in their shares. With no nominee, the legal heirs get them under the Government Securities Act, 2006.
- Step 4TransferNot allowed, except to a nominee or legal heir after the holder's death.
- Step 5No trading or loanThe bonds cannot be sold in the market or used as security for a loan.
RBI Floating Rate Bonds tax and TDS
- TaxableInterestAt your slab rate
- NoDeduction on investmentNot under Section 123 (earlier 80C)
- 10% TDSIf interest is over ₹10,000In a financial year
- Form 121Stops TDSIf your tax is nil
- Interest: added to your income each year and taxed at your slab rate, in both the old and new tax regimes.
- No deduction on the investment: the amount you invest does not count under Section 123 (earlier 80C).
- Senior citizens: the ₹50,000 interest deduction under Section 153 (earlier 80TTB) is for interest on bank and post office deposits. These bonds are not deposits, so it does not cover their interest.
- TDS: the bank cuts 10% TDS when the interest paid in a financial year is more than ₹10,000. If your total income is below the taxable limit, give Form 121 (it replaced Forms 15G and 15H from April 2026) at the start of each year. The bank gives you a TDS certificate, and any extra TDS comes back when you file your return.
Example: Tax on ₹10,00,000. The interest is ₹80,500 a year. It is above ₹10,000, so TDS is cut unless Form 121 is given. At the 30% slab with 4% cess, the tax is ₹25,116 a year.
- Interest a year
- ₹80,500
- TDS cut
- ₹8,050
- After tax at 30%
- ₹55,384
RBI Floating Rate Bonds: strengths and limits
- Yes: Backed by the Government of India
- Yes: No upper limit on the amount
- Yes: Rate rises if the NSC rate rises
- Yes: Regular interest every six months
- Yes: Open to all resident individuals, not only seniors
- No: Rate falls if the NSC rate falls
- No: Interest is fully taxable, no deduction
- No: Locked in for 7 years if you are under 60
- No: Cannot be sold or used for a loan
- No: No cumulative option
Floating Rate Bonds vs SCSS vs FD
| RBI Floating Rate Bonds | SCSS | Bank FD | |
|---|---|---|---|
| Interest rate | 8.05%, changes every 6 months | 8.2%, fixed for 5 years | Set by each bank, fixed for the term |
| Who can invest | Resident individuals and HUFs | Age 60+ (some retirees earlier) | Anyone |
| Interest paid | Every 6 months | Every 3 months | Monthly, quarterly or at the end |
| Maximum | No limit | ₹30 L | No limit |
| Term | 7 years | 5 years, + 3 years | 7 days to 10 years |
| Early exit | Only for 60+, after 4 to 6 years | Allowed, with a charge | Allowed, usually with a charge |
| Tax deduction | No | Old regime, Section 123 (80C) | Only the 5-year tax-saver FD |
| Safety | Government of India | Government of India | Bank; deposit insurance by DICGC up to a limit |
On ₹5,00,000, SCSS pays ₹41,000 a year against ₹40,250 from the bond today. Read more on the Senior Citizen Savings Scheme page, or compare the numbers on the RBI Floating Rate Bond calculator and the FD calculator.
Frequently asked questions
What are RBI Floating Rate Savings Bonds?
They are 7-year bonds issued by the Government of India and sold through RBI's chosen banks. The full name is Floating Rate Savings Bonds, 2020 (Taxable). The interest rate is the NSC rate plus 0.35%, and interest is paid every six months.
What is the RBI Floating Rate Bond interest rate now?
8.05% a year for 1 July 2026 to 31 December 2026, paid on 1 January 2027. It is the NSC rate of 7.7% plus 0.35%.
How often does the RBI bond rate change?
Every six months, on 1 January and 1 July. On each of these dates the rate is set to the NSC rate in force on that day plus 0.35%. If the NSC rate does not change, the bond rate stays the same.
Who can invest in RBI Floating Rate Savings Bonds?
Resident Indian individuals, alone or jointly, and HUFs. A parent or guardian can invest for a minor. NRIs cannot invest.
What is the minimum and maximum investment?
The minimum is ₹1,000, and you can invest more in multiples of ₹1,000. There is no maximum limit.
Is there a cumulative option in RBI Floating Rate Bonds?
No. These bonds only pay interest every six months, on 1 January and 1 July. The interest is not added to the bond.
Can I withdraw RBI Floating Rate Bonds before 7 years?
Only if you are 60 or older. The lock-in is 6 years for ages 60 to 70, 5 years for ages 70 to 80, 4 years for ages 80 and above. 50% of the interest for the last six months is taken back. People under 60 must wait the full 7 years.
Where can I buy RBI Floating Rate Savings Bonds?
At the chosen branches of SBI, the nationalised banks and some private banks such as IDBI Bank, Axis Bank, HDFC Bank and ICICI Bank, often through their net banking too. You can also buy them on the RBI Retail Direct portal.
Is RBI Floating Rate Bond interest taxable?
Yes. The interest is added to your income and taxed at your slab rate. 10% TDS is cut if the interest is more than ₹10,000 in a financial year, unless you give Form 121. There is no tax deduction on the amount you invest.
Can I sell RBI bonds or take a loan against them?
No. The bonds cannot be traded or sold to another person. They can pass only to a nominee or legal heir after the holder's death. Banks and NBFCs do not accept them as security for a loan.
Is RBI Floating Rate Bond better than SCSS?
For people aged 60 or more, SCSS pays 8.2% today, more than the bond's 8.05%, but SCSS has a ₹30 L limit and a 5-year term. The bond has no limit and anyone resident can buy it. Many seniors use SCSS first and the bond for money above the SCSS limit.
Is RBI Floating Rate Bond better than an FD?
It depends on the bank FD rate at the time. The bond is backed by the Government of India and its rate moves with the NSC rate. An FD has a fixed rate, can be closed early by anyone, and can be used for a loan. Compare the rates before you decide.