- KredX Editorial Team
- 14 Sep 21
- Bond investment,Investor

The Indian Government issues the Reserve Bank of India's Floating Rate Savings Bonds. The subscription for Floating Rate Savings Bonds 2020 was made available on 01 July 2020. As an investor, you can buy RBI’s Floating Rate Savings Bonds 2020 from private or public sector lenders.
However, the interest rate on these bonds is subject to change every 6 months. In July 2021, the Reserve Bank of India declared the interest rate on its Floating Rate Savings Bond from July 2021 to December 2021. The said interest rate is set at 7.15%.
On that note, let us uncover more about this bond below.
What Is The Interest Rate On Floating Rate Savings Bond 2020?
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 2021, and due on 01 January 2022. Notably, the prevailing interest is payable every 6 months, without the availability of a cumulative option.Floating Rate Savings Bond 2020: Everything You Need To Know
The ins and outs of Floating Rate Savings Bond 2020 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 |