RBI Floating Rate Bonds – Advantages & Interest Rate

RBI Floating Rate Savings Bonds 2020 (Taxable), also known as the GOI Bonds, currently offer a taxable interest rate of 8.05% (till 31st Dec 2025) over a seven-year term. They are called floating-rate bonds because the interest rate on these bonds is linked to the NSC rate. In accordance with the scheme guidelines issued on June 26, 2020, these floating rate bonds will continue to earn 0.35% higher ROI than the prevailing NSC rate. Coupon/Interest rate on these bonds is subject to change every six months, on January 1 and July 1, if NSC's ROI changes.
Historical Evolution of RBI Bonds in India
For many years, government-backed savings instruments have been available, giving everyday citizens a way to invest in the nation’s progress. In the past, options like RBI Relief Bonds and 8.05% Savings Bonds were quite popular. The launch of floating-rate bonds represented a significant change, allowing investors to benefit from interest rates that move with the economy instead of being stuck with fixed rates.
What Are Floating Rate Savings Bonds?
Floating Rate Savings Bonds are debt instruments issued directly by the Government of India through the RBI. Unlike fixed-rate bonds, their returns are tied to current market benchmarks. This means that investors earn a rate that reflects the present economic climate, striking a nice balance between predictability and flexibility.

Eligibility to Invest in RBI Bonds
Investment opportunities are available to Indian residents, Hindu Undivided Families (HUFs), and certain institutions. However, Non-Resident Indians (NRIs) are not allowed to participate. This focus ensures that the scheme primarily benefits local savers and retirees.