Key Takeaways
- RBI Floating Rate Savings Bonds offer 8.05% (as of 2026) — Government of India-backed, zero default risk.
- No maximum investment limit — ideal for retirees who have maxed out the ₹30 lakh SCSS limit.
- Rate resets every 6 months — floats with NSC rate + 35 bps; protects against rate cut risk.
- Cannot be traded on exchanges — a 7-year lock-in (with limited senior citizen exceptions) means this is a hold-to-maturity instrument.
- Interest is fully taxable — factor post-tax yield for your bracket into the comparison with SCSS and other alternatives.
Introduction
Most people know about FDs, PPF, and SCSS. Far fewer know about the RBI Floating Rate Savings Bond — a Government of India-backed instrument that adjusts its interest rate every 6 months based on the NSC rate. As of 2026, it offers 8.05% per annum — among the best guaranteed rates available to all Indian investors, with no age restriction.
| Feature | RBI Floating Rate Savings Bond |
|---|---|
| Issuer | Government of India (via RBI) |
| Current rate (2026) | 8.05% p.a. — resets every January 1 and July 1 |
| Rate formula | NSC (National Savings Certificate) rate + 35 basis points |
| Minimum investment | ₹1,000 (and multiples thereof); no maximum |
| Tenure | 7 years from date of issue |
| Premature encashment | Allowed for investors 60+ after specified lock-in periods; not for others before 7 years |
| Tax on interest | Fully taxable at applicable slab rate; TDS above ₹10,000/year |
| Trading/selling | NOT listed or tradeable — cannot be sold on exchanges |
| Who can invest | Resident individuals and HUFs; NRIs not eligible |
How to Invest in RBI Floating Rate Bonds
RBI Floating Rate Savings Bonds are available through:
- RBI Retail Direct Portal (retailing.direct.gov.in) — direct, commission-free.
- Most nationalised and major private banks (HDFC Bank, ICICI Bank, SBI, Axis Bank, etc.) — physical form with demat options.
The process is simple: submit KYC documents, fill the application, and the bond is credited electronically to your RBI Retail Direct or bank demat account.
Comparison with SCSS
| Parameter | RBI Floating Rate Bond | SCSS |
|---|---|---|
| Interest rate | 8.05% (floating) | 8.2% (currently fixed quarterly) |
| Investment limit | No maximum limit | ₹30 lakh |
| Tenure | 7 years | 5+3 years |
For investors who have maxed out SCSS, RBI Floating Rate Bonds are a natural complement — same government guarantee, no limit.
Disclaimer
Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Past performance is not indicative of future results. Baid Inbest LLP is an AMFI-registered Mutual Fund Distributor (ARN: 86114). This content is for educational purposes only and does not constitute personalised investment advice.
Interested in RBI Floating Rate Bonds as part of your fixed income strategy? Inbest advisors can guide you — visit www.inbestnow.com or call +91 9903921999.
