India Retains Floating Rate Savings Bond at 8.05% for January–June 2026 Period

The Government of India has retained the interest rate on the Floating Rate Savings Bond, 2020 (Taxable) at 8.05% for the period from January 1, 2026, to June 30, 2026.  

The interest rate is adjusted every 6 months, and this update follows the regular schedule defined at the bond’s inception. 

Government Maintains Rate at 8.05% Based on NSC Benchmark 

As per the notification issued on January 1, 2026, the interest on the Floating Rate Savings Bond remains fixed at 8.05% for the 1st half of 2026.  

This rate is determined using the National Savings Certificate (NSC) as a benchmark, adding a fixed spread of 35 basis points to the prevailing NSC rate. The NSC currently offers 7.70%, resulting in the bond rate of 8.05%. 

Interest from these bonds is paid out every 6 months, and the next payout is scheduled for July 1, 2026. The interest income is fully taxable. 

Features of Floating Rate Savings Bond, 2020 (Taxable) 

These bonds are issued by the Reserve Bank of India (RBI) on behalf of the Government of India. The core feature is their floating interest rate, which gets revised every 6 months. Unlike fixed-income instruments, this bond aligns returns with movements in small saving schemes such as NSCs. 

The bond provides a layer of protection in a changing interest rate environment and pays interest twice a year. However, premature withdrawal is only allowed for specific eligible investors under defined conditions. 

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Eligibility, Taxation and Investment Details 

Indian residents, including individuals and Hindu Undivided Families (HUFs), can invest in these bonds. There is no upper limit on the investment, and the bonds have a tenure of 7 years. Interest earned is taxed as per the individual’s income tax slab and is paid directly into the investor’s bank account. 

Conclusion 

The government has retained the interest rate for Floating Rate Savings Bond, 2020 (Taxable) at 8.05% for January to June 2026. This reflects the linked nature of the bond with the NSC benchmark and provides semi-annual interest payments based on market-linked rates. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing