Know About RBI’s Floating Rate Savings Bonds For July-December 2021
What Is The Interest Rate On Floating Rate Savings Bond 2021?The interest rate on this bond remains unchanged from the month of July to December in a calendar year. For instance, this year, the interest will remain the same for the period between 01 July and 31 December 2022, and due on 01 January 2023. Notably, the prevailing interest is payable every 6 months, without the availability of a cumulative option.
Floating Rate Savings Bond 2021: Everything You Need To KnowThe ins and outs of Floating Rate Savings Bond 2021 are highlighted below:
- Investors can begin investing with an initial contribution of Rs. 1,000. This contribution does not have any upper limit.
- The interest rates on these bonds may fluctuate throughout their tenure. Fluctuating interest rates ensure that investors earn returns depending on the interest rates prevailing in the market.
- Interest payouts from Floating Rate Savings Bond take place every year in January and July.
- These bonds do not offer any benefits to their investors under the Income Tax Act. Therefore, interests on the bonds are fully taxable as per an investor’s tax bracket. Also, investors are liable to pay TDS on his/her earned interest.
- Interest rates on these bonds are tweaked every 6 months. The prevailing rate of interest is higher than that of other investment vehicles, such as fixed deposits with banks, NSC, Public Provident Fund, and several other small savings schemes in India.
- These bonds come with a tenure of 7 years. Although these have a tenure of 7 years, premature withdrawals are available for individual investors. However, investors are subject to a lock-in period based on their age:
|Age Bracket Of An Individual Investor||Lock-In Period From the Issuing Date|
|80 years of age or above||4 years|
|Aged between 70 to 80 years||5 years|
|From 60 to 70 years of age||6 years|