Bonds
RBI Floating Rate Savings Bonds
7-year taxable bond at NSC rate + 35 bps, reset half-yearly.
What it is
Floating Rate Savings Bonds 2020 (Taxable): individuals and HUFs (no NRIs) invest from Rs.1,000 with no maximum, earn half-yearly interest on 1 Jan and 1 Jul, and redeem after 7 years. Coupon resets at the prevailing NSC rate plus 35 bps — 8.05% on 1 Jan 2024.
Min ticket: Rs.1,000 face, no maximum · Bond Ledger Account (demat)
How to buy it
- Subscribe at SBI, nationalised banks, IDBI, Axis, HDFC, ICICI or SHCIL in Bond Ledger Account form.
- Interest is non-cumulative — paid out half-yearly, never compounded.
- Senior citizens get early-redemption windows; everyone else holds 7 years.
Costs
- No scheme fees
- No compounding — payouts sit idle unless reinvested
Liquidity
Not tradeable, not loan-eligible; premature redemption only for senior-citizen brackets.
Regulation
Government of India scheme; RBI notification + receiving-office terms (SBI desk).
Risks that bite
- Coupon resets down when NSC rates fall
- Interest fully taxable at slab
Tax FAQ
How is RBI Floating Rate Savings Bonds taxed?
Interest is taxed at your slab. Transfer or redemption gains follow the post-23-Jul-2024 rules: listed paper held over 12 months is LTCG at 12.5% without indexation, short-term gains join income at slab, and unlisted bonds are always deemed short-term under section 50AA.
Sources
Reviewed 24 Sept 2026. Yields move — the RBI portal, CCIL and the tax department are the authority, and this hub links straight to them.
- RBI - Floating Rate Savings Bonds press release (PRID 53020; 2021-2022/1465, 31 Dec 2021)FRSB 2020 (Taxable): NSC rate + 35 bps spread, reset half-yearly from 1 Jan 2021.
- SBI - RBI Floating Rate Savings Bonds desk (receiving-office terms)Eligibility (individuals + HUF, no NRIs); demat form in a Bond Ledger Account only; Rs.1,000 minimum, no maximum; 7-year tenure; half-yearly interest (8.05% on 1 Jan 2024); non-cumulative, non-tradeable, not loan-eligible.
- CBDT - FAQs on the new capital-gains regime (PIB, 24 Jul 2024, PRID 2036604)Two holding periods since 23 Jul 2024 (12 months listed, 24 months other); other-LTCG at 12.5% without indexation.
- Income Tax Department - Tax on sale of debentures (as amended by Finance Act, 2026)Post-23-Jul-2024 holding table (listed debentures/G-secs: 12 months; unlisted: deemed STCG).
- Income Tax Department - Section 50AA (special provision for specified securities)Unlisted bonds/debentures transferred, redeemed or matured on/after 23 Jul 2024 are deemed short-term.