The Reserve Bank of India (RBI) has retained the interest rate on its Floating Rate Savings Bond (FRSB) 2020 (Taxable) at 8.05% for the period from July 1, 2026, to December 31, 2026. The decision follows the government's move to keep the National Savings Certificate (NSC) interest rate unchanged at 7.7% for the second quarter of FY27.
As the bond's coupon is linked to the NSC rate with an additional spread of 0.35%, the effective interest rate remains unchanged. The bond continues to provide a sovereign-backed investment avenue with periodic interest payments.
The RBI has confirmed that the coupon rate on the Floating Rate Savings Bond will remain at 8.05% during the July 1, 2026, to December 31, 2026, period. Interest accrued during this period will be paid on January 1, 2027.
The rate is determined using a formula linked to the NSC interest rate. Since the NSC rate has been retained at 7.7%, the bond's coupon remains unchanged after adding the fixed spread of 0.35%.
Unlike traditional fixed deposits, the RBI Floating Rate Savings Bond does not offer a fixed interest rate for its entire tenure. The coupon rate is reset every 6 months on January 1 and July 1 based on the prevailing NSC rate announced by the government.
If the NSC rate increases, the bond's interest rate can rise at the next reset date. Similarly, if the NSC rate falls, the bond's return may also decline, meaning investors do not receive a guaranteed 8.05% return throughout the 7-year tenure.
The current return offered by the RBI bond compares favourably with several government-backed savings products. The latest interest rates are shown below:
| Scheme | Interest Rate |
| Senior Citizen Savings Scheme (SCSS) | 8.2% |
| RBI Floating Rate Savings Bond | 8.05% |
| National Savings Certificate (NSC) | 7.7% |
| 5-Year Post Office Time Deposit | 7.5% |
| Monthly Income Account Scheme | 7.4% |
| Public Provident Fund (PPF) | 7.1% |
While the RBI bond offers a higher return than many small savings schemes, it remains below the SCSS rate.
The RBI Floating Rate Savings Bond is backed by a sovereign guarantee, making it a government-backed fixed-income instrument. Unlike some small savings schemes, there is no upper investment limit on the bond.
The interest rate is linked to the NSC rate and reviewed every 6 months. Investors considering the bond should also evaluate factors such as taxation and liquidity, as interest earned is taxable and the rate can vary over the investment period.
Read More: Small Savings Interest Rates Stay Unchanged for Q2 FY27.
Want to track these market movements in Hindi? Visit Angel One News for daily updates and comprehensive share market news in Hindi.
The RBI's decision to maintain the Floating Rate Savings Bond coupon at 8.05% reflects the unchanged NSC interest rate for the current period. The bond continues to provide investors with a government-backed investment option that currently offers returns higher than several popular savings schemes.
Its floating-rate structure allows returns to adjust with changes in the NSC rate over time. However, investors should understand the impact of interest rate resets, taxation and liquidity considerations when evaluating the instrument.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/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.
The Reserve Bank of India (RBI) has retained the interest rate on its Floating Rate Savings Bond (FRSB) 2020 (Taxable) at 8.05% for the period from July 1, 2026, to December 31, 2026. The decision follows the government's move to keep the National Savings Certificate (NSC) interest rate unchanged at 7.7% for the second quarter of FY27.
As the bond's coupon is linked to the NSC rate with an additional spread of 0.35%, the effective interest rate remains unchanged. The bond continues to provide a sovereign-backed investment avenue with periodic interest payments.
The RBI has confirmed that the coupon rate on the Floating Rate Savings Bond will remain at 8.05% during the July 1, 2026, to December 31, 2026, period. Interest accrued during this period will be paid on January 1, 2027.
The rate is determined using a formula linked to the NSC interest rate. Since the NSC rate has been retained at 7.7%, the bond's coupon remains unchanged after adding the fixed spread of 0.35%.
Unlike traditional fixed deposits, the RBI Floating Rate Savings Bond does not offer a fixed interest rate for its entire tenure. The coupon rate is reset every 6 months on January 1 and July 1 based on the prevailing NSC rate announced by the government.
If the NSC rate increases, the bond's interest rate can rise at the next reset date. Similarly, if the NSC rate falls, the bond's return may also decline, meaning investors do not receive a guaranteed 8.05% return throughout the 7-year tenure.
The current return offered by the RBI bond compares favourably with several government-backed savings products. The latest interest rates are shown below:
| Scheme | Interest Rate |
| Senior Citizen Savings Scheme (SCSS) | 8.2% |
| RBI Floating Rate Savings Bond | 8.05% |
| National Savings Certificate (NSC) | 7.7% |
| 5-Year Post Office Time Deposit | 7.5% |
| Monthly Income Account Scheme | 7.4% |
| Public Provident Fund (PPF) | 7.1% |
While the RBI bond offers a higher return than many small savings schemes, it remains below the SCSS rate.
The RBI Floating Rate Savings Bond is backed by a sovereign guarantee, making it a government-backed fixed-income instrument. Unlike some small savings schemes, there is no upper investment limit on the bond.
The interest rate is linked to the NSC rate and reviewed every 6 months. Investors considering the bond should also evaluate factors such as taxation and liquidity, as interest earned is taxable and the rate can vary over the investment period.
Read More: Small Savings Interest Rates Stay Unchanged for Q2 FY27.
Want to track these market movements in Hindi? Visit Angel One News for daily updates and comprehensive share market news in Hindi.
The RBI's decision to maintain the Floating Rate Savings Bond coupon at 8.05% reflects the unchanged NSC interest rate for the current period. The bond continues to provide investors with a government-backed investment option that currently offers returns higher than several popular savings schemes.
Its floating-rate structure allows returns to adjust with changes in the NSC rate over time. However, investors should understand the impact of interest rate resets, taxation and liquidity considerations when evaluating the instrument.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/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.
Published on: Jul 2, 2026, 1:15 PM IST
Akshay Shivalkar
Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and mutual funds, he simplifies complex financial concepts to help investors make informed decisions through his writing.
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