Floating Rate Savings Bond: Interest For July-December Quarter Announced -- Check Details

Floating Rate Savings Bonds may be held by a person who is a resident of India or HUF --check eligibility, issue price, taxation and other details.

New Delhi: The Reserve Bank of India has announced the Floating Rate Savings Bond interest for July-December 2024. In a release, the RBI has said that FRSB remains unchanged for the July-December quarter.

"In terms of Para 13 (ii) of Government of India Notification F.No.4(10)- B(W&M)/2020 dated June 26, 2020 on Floating Rate Savings Bonds, 2020 (Taxable)- FRSB 2020 (T), the coupon/interest rate of the bond would be reset half yearly, starting with January 01, 2021 and the coupon/interest rate will be set at a spread of (+) 35 bps over the prevailing National Savings Certificate (NSC) rate," RBI said in a release.

Accordingly, RBI added that the coupon rate on FRSB 2020 (T) for the period July 01, 2024 to December 31, 2024 and payable on January 1, 2025 remains at 8.05% (7.70%+0.35%), unchanged from the previous half-year.

Floating Rate Savings Bond Eligibility

Floating Rate Savings Bonds, 2020 were notified by the government with effect from July 1, 2020. The bonds may be held by a person who is a resident of India. Bonds can be held in the following eligibility:

a. in her or his individual capacity or
b. in individual capacity on joint basis, or 
c. in individual capacity on any one or survivor basis, or
d. on behalf of a minor as father/mother/legal guardian

Bond can be held by Hindu Undivided Family provided that if the holder of the bond subsequently becomes Non-Resident Indian during the currency of the bond, shall continue to hold the bonds and repatriability of interest/matury proceeds will be subject to FEMA guidelines.

Floating Rate Savings Bond Issue Price

a. The bonds will be issued at par i.e, at Rs 100
b. The bonds will be issued for a minimum amount of Rs 1000 face value and in multiples thereof.

Floating Rate Savings Bond Investment Limit

There is no maximum limit for investment in the Bonds and interest on the bonds will be payable at half yearly intervals from the date of issue.

Floating Rate Savings Bond Income Tax 

Interest in the Bonds will be taxable under the Income tax Act 1961 as applicable according to the relevant tax status of the bonds holders.