RBI Backed
RBI Floating Rate Savings Bonds (FRSB)
Verified Indian financial mathematics, statutory regulations, and step-by-step actionable breakdowns.
Expected YieldNSC rate + 0.35% (reset half-yearly)
Lock-In Tenure7 Years
Risk LevelZero Risk
Tax StatusTaxable as Slab
Overview & Statutory Background
RBI Floating Rate Savings Bonds are 7-year Government of India bonds with interest linked to the NSC rate plus a fixed spread, reset every January and July. They are available through authorised banks and RBI Retail Direct.
Key Features & Operational Guidelines
Sovereign guarantee
Half-yearly interest payout (no cumulative option)
No maximum investment limit
Minimum ₹1,000 in multiples of ₹1,000
Who is Eligible to Invest?
- •Resident individuals and HUFs; NRIs are not eligible
Indian Taxation Breakdown
| Stage | Tax Treatment |
|---|---|
| Initial Investment | No deduction. |
| Interest & Returns | Interest taxable as per slab; TDS applies. |
| Maturity / Withdrawal | Principal repaid at maturity. |
Advantages & Limitations
Key Advantages (Pros)
- ✓Rate resets with the market
- ✓Zero credit risk
- ✓Regular income
Important Limitations (Cons)
- ✕Taxable interest
- ✕Fixed 7-year lock-in with limited early exit
- ✕No cumulative option
RBI Floating Rate Savings Bonds (FRSB) FAQs
Senior citizens aged 60-70 can redeem after 6 years, 70-80 after 5 years, and 80+ after 4 years, with a penalty of 50% of the last coupon.
Calculate Compound Returns
Use our interactive calculators to simulate exact growth schedules for this asset.