Floating Rate Bonds

RBI Floating Rate Bonds Presentation 2023 RR FINANCE

INTRODUCTION RBI Floating Rate Bonds RBI Floating Rate Savings Bonds 2020 (Taxable), also known as GOI Bonds, have a seven-year term and currently offer a taxable interest rate of 8.05%. These bonds are referred to as floating-rate bonds because their interest rate is linked to the National Savings Certificate (NSC) rate. As per the scheme guidelines issued on June 26, 2020, these floating rate bonds will always earn an interest rate that is 0.35% higher than the prevailing NSC rate. The coupon or interest rate on these bonds is subject to change every six months, specifically on January 1st and July 1st, if there are changes in the NSC's rate. The linkage to the NSC rate ensures that the interest payments on these bonds remain in sync with market conditions, providing investors with potential adjustments in line with prevailing interest rates. Investors in these floating rate bonds can benefit from the potential for higher returns if the NSC rate increases, as the interest rate on the bonds will also increase.

Interest Rate RBI Floating Rate Bonds Effective from 1st July, 2023, the interest rate on floating rate bonds has been raised from 7.35% to 8.05%. Current ROI ROI Increase New ROI from (1st -Jul-20 23) 7.35% 0.70% 8.05%

Issuer KEY FEATURES Rate of RBI on behalf Interest Minimum 8.05% of Govt. of Investment (floating) India 1000/- Interest Tenure Interest Payout Freq. 7 years Payout Date Semi Annual Jan 1st and July 1st

How RBI FRB scores over bank FDs Bank FDs ROI on RBI Floating Rate Bank Name Rate of Interest Bonds HDFC 7.00% 8.05% till 31st-Dec-2023 SBI 6.50% PNB 6.50% Axis 7.00%

Prematurity withdrawal The bonds will be repayable after the completion of 7 years. Premature withdrawal is allowed only for those whose age is 60 years and above subject to the submission of documents relating to the date of birth proof. Age Group Lock-in period 60 – 70 Years 6 Years 70 – 80 Years 5 Years Beyond 80 Years 4 Years

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