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RBI Floating Rate Bonds, 2020 (Taxable) – FRSB 2020 (T)

Issued by the Govt. of India via GoI Notification F.No.4(10)-B(W&M)/2020 dated June 26, 2020 with effect from July 1 st , 2020.



Introduction

  • 100% Risk-Free investment from the Govt. of India
  • Maximum limit: No limit; Minimum investment: Rs.1,000 & multiples of Rs.1,000
  • Bond tenure: 7 years; Premature withdrawal available for senior citizens
  • Interest payable semi-annually: July 1 st & January 1 st
  • Suitable for conservative investors looking for assured returns from a risk-free investment


Key Features



    Sovereign guarantee :

    Bonds are issued by Reserve Bank of India on behalf of the Govt. of India & ICRA.

    Investment Amount :

    The minimum investment is Rs.1,000 and multiples thereof; No upper limit on the maximum investment.

    Interest Rate :

    ▪ Linked/pegged with the prevailing National Saving Certificate (NSC) rate with spread of (+) 35 bps over the respective NSC rate.

    ▪ The interest rate is reset half-yearly on January 1 & July 1 st for the next 6 months.

    ▪The interest rate for the period Jan 1, 2026 to June 30, 2026 and payable on July 1, 2026 will be 8.05% (7.70% + 0.35% = 8.05%).

    ▪ Interest will be compulsorily paid out every 6 months; no cumulative option is available.

    Maturity :

    7 years from date of investment with premature withdrawal options for senior citizens.

    Trading:

    ▪ Bonds cannot be traded in the secondary market.

    ▪ Bonds cannot be transferred to anyone during the tenure of the bond.

    ▪ Loan facility is not available on these bonds.

    Nomination:

    ▪ Form ‘C’ with wet signatures has to be submitted at the nearest branch of SHCIL.

    ▪ Nomination can be done by sole holders or joint holders.

    ▪ Non-Resident Indian (NRI) can also be nominated.

    ▪ No nomination can be made in respect of Bonds issued in the name of a minor.

    Tax Treatment:

    Tax will be deducted at source (TDS) while making interest payment on the bonds.



Key Benefits



Highest Safety

Issued by Reserve Bank on India on behalf of the Govt. of India; Carries Sovereign risk.

High Interest Rate

Interest rate is linked to the prevailing NSC rate with spread of +35 bps. The current interest rate is 8.05%.

Early Withdrawal

Senior citizens in age bracket of 60 years onwards are eligible for premature encashment



Eligible Investors


  • Individuals (not being a Non-Resident Indian)
    • His or her individual capacity
    • Individual capacity on joint basis
    • Individual capacity on anyone or survivor basis
    • On behalf of minor as father / mother / legal guardian
  • Hindu Undivided Family (HUF)


Premature Encashment for Senior Citizens

The following minimum lock-in period from date of issue will be applicable as per the investor’s age bracket:

Age Bracket Lock-in Period
60 – 70 years 6 years
70 – 80 years 5 years
80 years & above 4 years


Process To Invest

We are currently offering RBI Bonds through Offline mode only for investments.

Supporting documents to be attached with the application form:
  1. PAN Card of all holders ; In case of HUF application, please attach PAN cards of HUF & Karta.
  2. Masked Aadhaar Card of all holders.
  3. Cancelled cheque copy of the 1st holder’s bank a/c for interest credit.
Cheque should be in favor of HDFC BANK-RBI Floating Rate Saving Bonds, 2020 ( Taxable)
Attached herewith Application form (New Series), HDFC Branch List.

The Bonds will be issued only in electronic form and held at the credit of the holder in an account called Bond Ledger Account (BLA), opened with the Receiving Office of SHCIL (as authorized by the RBI). A Certificate of Holding (COH) will be issued to the holder/s of the Bonds as proof of subscription.

The nomination form can be downloaded from here . It needs to be submitted at the nearest branch of SHCIL along with a photocopy of the Certificate of Holding (COH).