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 January 01, 2024 to June 30, 2024 and payable on July 1, 2024 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
![](/FixedIncome/Content/images/RBI/Group 131.png)
Highest Safety
Issued by Reserve Bank on India on behalf of the Govt. of India; Carries Sovereign risk.
![](/FixedIncome/Content/images/RBI/Group 130.png)
High Interest Rate
Interest rate is linked to the prevailing NSC rate with spread of +35 bps. The current interest rate is 8.05%.
![](/FixedIncome/Content/images/RBI/Group 133.png)
Early Withdrawal
Senior citizens in age bracket of 60 years onwards are eligible for premature encashment
Eligible Investors
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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
The portal can be accessed through the following link: Click here
After completing the login formalities through PAN & Aadhaar verification, you need to confirm your demographic and communication details.
Post that, the system will ask to Select Nearest Stockholding Branch:
From the dropdown provided, please select Parel Branch for Nearest Stockholding Branch.
The system will then ask for the BA Code:
Pls mention 121711 as the BA Code.
These two inputs are IMPORTANT so we can track your application and handle any servicing concerns.
Detailed walk-through of the investment portal is attached below to help you smoothly navigate through the entire process.
Walk Through For Client - Fresh Investment_FRSB, 2020.pdf