RBI Floating Rate Savings Bonds 2020

Make convenient investments with low-risk returns

RBI Floating Rate Savings Bonds

The RBI Floating Rate Savings Bonds are a simple, low-risk investment option that is perfect for those looking for a hassle-free way to grow their money.

With attractive RBI Floating Rate Bond interest rates and an extended maturity period, these bonds allow you to grow money over time. Plus, you can start investing with as little as ₹1,000 and increase the investment amount in multiples of ₹1,000. It must be noted that interest earned on these bonds is subject to taxation.

Features of RBI Floating Rate Bond

Hassle-free investment

Invest in an RBI Floating Rate Savings Bond by visiting the nearest Axis Bank branch or using Internet banking.

Get the best interest rate for your money

Enjoy competitive interest rates to help your savings grow faster.

Invest as much as you want

Start with a minimum of ₹1,000 and invest more in increments of ₹1,000.
No cap on the maximum amount.

Lock in your investment for a secure future

The bonds mature in 7 years from the date of issue.

Secure your legacy with the nomination facility

Sole holders can nominate their loved ones

Your bond, your ownership

RBI Floating Rate Bonds cannot be transferred, giving you complete control and ownership.

Benefits of Floating Rate Savings Bonds

Backed by the Government of India, RBI Floating Rate Bonds offer some other noteworthy perks:

Suitable long-term investment option

These bonds offer a fixed income with pre-determined interest rates. With a maturity of 7 years these bonds provide stability and are ideal for conservative investors seeking a reliable return over time.

Online and offline application

You can apply either online or offline. Just head to your bank's website and fill out the application. However, online applications are only for individual accounts, so if you are applying jointly or as a minor, visit the bank branch.

Flexibility

Decide how you want to receive your returns, whether you want it all at once or a steady stream of income.

Advantages of investing in RBI Floating Rate Savings Bonds 2020

RBI Floating Rate Savings Bonds 2020 are fixed-income instruments issued by the Government of India. They offer pre-determined interest rates that are reset periodically. These bonds offer a secure and safe investment option, suitable for risk-averse investors. The Bonds shall be repayable on the expiration of 7 years from the date of issue, making it a suitable long-term investment option. Some benefits of investing in Savings Bonds are as follows:

Online and offline application:
You can apply either online or offline. In the online procedure, you can apply for FRSBs on your bank’s official website, while for an offline application, you can visit your bank branch. Keep in mind that in case of online application, neither joint account nor minor applicant is permitted.
Choice of income or capital appreciation:
While investing in RBI FRSB, you can choose to receive interest and principal on maturity through the cumulative option or opt for receiving interest income. In the latter, the interest is paid out every six months, while the cumulative option offers a maturity value.

Eligibility criteria for RBI Floater Bonds

You can invest in RBI FRSBs if you meet the following criteria:

Resident Indians
Joint investors
Parents/guardians on behalf of minors
HUFs (Hindu Undivided Families)
Charitable institutions
Universities

Note: NRIs are not eligible to invest in RBI Floater Bonds.

The interest on the bonds is paid out twice a year- on January 1st and July 1st.
The interest paid out on January 1st and July 1st will be linked to the prevailing NSC (National Saving Certificate) interest rates, with an additional 35 basis point boost.
The current interest rate on National Savings Certificates is 7.7%. As of January 1, 2024, Fixed Rate Savings Bond (FRSB) holders can earn a better rate of 8.05%.

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Taxation of Floating Rate Savings Bonds

The interest earned on RBI Savings Bonds is taxable under the Income Tax Act of 1961.

You will pay taxes on that interest based on your income tax bracket.
Tax Deducted at Source (TDS) will be applicable to interest payout.
In case of other tax exemptions, declare them in your application.

Note: RBI Floating Rate Savings Bonds are completely exempt from wealth tax. However, the principal investment is not tax-deductible.

How to invest in RBI Floating Rate Savings Bonds online?

Visit the Axis Bank Internet Banking page.
Log in to your account.
Select “Investments”.
Click on “Savings Bonds”.
Enter the investment details, including the investment amount and bank account number.
Add a nominee.
Mark the T&C checkbox and review the provided details.
Click on “Confirm”.
Verify the OTP received on your registered mobile number to complete the application process.

Frequently Asked Questions

Why should you invest in Floating Rate Savings Bonds?

Investing in RBI Floater Bonds offers numerous benefits. One of the best things about investing in such bonds is that you get to enjoy high RBI Floating Rate Bond interest rates with interest payable semi-annually on January 1st and July 1st.
The investment remains locked in for 7 years, which is perfect for anyone looking for a long-term investment option.

Who can invest in Floating Rate Savings Bonds?

Resident individuals, HUFs, charitable institutions and Universities can invest in RBI Floater Bonds.
If you are looking for a safe and steady investment, RBI Floating Rate Savings Bonds are a great choice.
The flexibility to choose between regular interest payouts and premature withdrawal makes these bonds especially suitable for retirees who want a regular income stream or anyone who wants to play it safe and avoid high-risk investments.

What is the tenure of the Floating Rate Savings Bonds?

RBI FRSBs typically come with a 7-year lock-in period. However, senior citizens can enjoy a shorter lock-in period. Here is how it works:

If you are 60-70 years old, the repayment period will be 6 years
If you are 71-80 years old, the repayment period will be 5 years
If you are 81 or older, the repayment period will be 4 years

It is important to note that early withdrawals by senior citizens will incur a penalty.

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Things to know before investing in Floating Rate Savings Bonds

Things to know before investing in Floating Rate Savings Bonds...

RBI Floating Rate Savings Bonds 2020

RBI Floating Rate Savings Bonds