RBI Bonds
RBI Floating Rate Savings Bonds — sovereign safety with a rate that resets every six months.
Overview
RBI Floating Rate Savings Bonds carry a sovereign guarantee, making them one of the safest instruments an Indian resident can hold. The interest rate resets every six months against the NSC rate, so your income keeps pace when rates rise.
At a glance
- Sovereign guarantee
- Floating rate
- Half-yearly payout
Key benefits
Sovereign guarantee — backed by the Government of India
Rate resets every six months, paid half-yearly
Seven-year tenure, with early exit for senior citizens
No upper limit on the amount you can invest
Current rate
8.05% p.a.
Reset
NSC + 0.35%, every Jan & Jul
Tenure
7 years
Minimum
₹1,000 — no upper limit
Rate as of the current reset. It changes every January and July with the NSC rate.
Our offerings
A shortlist we would put our own money into — not everything on the market.
RBI Floating Rate Savings Bond
- Rate of interest
- 8.05% (current reset)
- How it is set
- NSC rate + 0.35%
- Tenure
- 7 years
- Interest payout
- Half-yearly (Jan & Jul)
- Minimum
- ₹1,000
- Maximum
- No limit
Types of RBI Bonds
Sovereign guarantee
Backed by the Government of India. In credit terms there is nothing safer available to a resident individual.
Floating, not fixed
The rate resets every January and July at 0.35% above the prevailing NSC rate, so your income rises when rates rise.
Not tradable
The bonds cannot be traded, transferred or used as collateral for a loan. Nomination is available.
Limited early exit
Premature withdrawal is allowed only for senior citizens, with lock-in periods that vary by age bracket.
What to weigh before you invest
Seven years is a long lock
For anyone under 60 there is effectively no exit. Only commit money you are certain you will not need before maturity.
Interest is fully taxable
Interest is added to your income and taxed at your slab rate. In the 30% bracket the post-tax return is far less striking than the headline 8.05%.
The rate can fall too
Floating cuts both ways. If the NSC rate drops at a reset, your income drops with it.
Who RBI Bonds suits
If you recognise yourself here, it is worth a conversation — a free review, with no obligation and nothing to sign.
- Conservative investors who want sovereign safety above all else
- Anyone who wants income that keeps pace when interest rates rise
- Retirees seeking a dependable half-yearly payout
- Investors with a genuine seven-year horizon and no need for liquidity
Got questions? We have answers
What are RBI bonds?
RBI Floating Rate Savings Bonds are issued by the Reserve Bank on behalf of the Government of India. They carry a sovereign guarantee, run for seven years, and pay interest half-yearly at a rate that resets twice a year.
How is the interest rate decided?
It is pegged to the National Savings Certificate rate plus 0.35%, and is reset every January and July. That is how the current 8.05% is arrived at.
Are RBI bonds tradable?
No. They cannot be traded on an exchange, transferred to another person, or pledged as collateral. Nomination is permitted.
Are they better than a bank FD?
On safety, yes — a sovereign guarantee beats any bank. On flexibility, no — an FD can be broken, these cannot. They serve different jobs in a portfolio.
Is there a maximum investment?
No upper limit. The minimum is ₹1,000.
Can I exit before seven years?
Only if you are a senior citizen. Premature withdrawal opens after six years for those aged 60–70, five years for 70–80, and four years for those over 80, with a penalty on the interest. For everyone else, the seven years are absolute.
Is the interest tax-free?
No. This is the most common misconception. Interest is added to your income and taxed at your slab rate, and TDS is deducted. In the 30% bracket, 8.05% becomes roughly 5.6% post-tax.
Is the rate fixed at 8.05% for seven years?
No — it floats. It is reset every January and July to 0.35% above the prevailing NSC rate. If NSC falls, your rate falls at the next reset. That is the trade-off for being protected when rates rise.
How do I actually receive the interest?
It is credited to your bank account half-yearly, on 1 January and 1 July. There is no cumulative or growth option — these bonds pay out and cannot compound.
Can I hold these jointly, or nominate someone?
Yes to both. Joint holding is permitted, and nomination is available. Since the bonds cannot be transferred, getting the nomination right at the outset matters more than usual.
Can NRIs invest in RBI bonds?
No. RBI Floating Rate Savings Bonds are open only to resident individuals and HUFs. If you become an NRI while holding them, we will talk through what that means for your holding.
RBI bonds or a bank FD — which should I pick?
They do different jobs. RBI bonds win on safety and on rising rates, but lock you in for seven years and pay only half-yearly. An FD is breakable and flexible but carries bank credit risk and a fixed rate. Most portfolios have room for both.
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