RBI floating rate saving bond: Highest security, high interest; Know how to invest

RBI floating rate saving bond: Highest security, high interest; Know how to invest Tezzbuzz | 05/05/2025 03:24:17

Kolkata: With RBI steadily slashing key policy rates, the country is firmly set on a declining interest rate regime, which has already triggered a rate cut in the fixed deposits of all major banks. In this financial climate, it is becoming difficult for the common people to find guaranteed-return instruments. Therefore, RBI sa savings bond can be of interest to these risk-averse investors.

These bonds are blessed with sovereign backing. These currently offer a rate of 8.05%, which is higher than most senior citizen bank fixed deposits offer. These bonds have a maturity period of seven years. The depositor receives interest payment twice a year — on January 1 and July 1. One can invest a minimum of Rs 1,000 and there is no ceiling for investment in these bonds.

The rate of interest — known as coupon rate in the case of bonds — is calculated as the rate of interest of applicable to National Savings Certificates (NSC) plus a spread of 0.35%. Let’s see how one can invest in these bonds. These bonds are issued in only in demat forms.

How to invest in RBI Floating Rate Savings Bonds

One can invest in RBI Floating Rate Savings Bonds in three ways — through RBI retail direct website or application, the app/website of a bank and from bank branch.

Through RBI: The first step involves in creating an RBI retail direct (RDG) account using KYC documents and details of bank savings account. Once this step is done, one has to enter the RBI retail direct homepage
Then one should click on ‘FRSB’ after entering rbiretaildirect.in
Then one should bid for RBI Floating Rate Savings Bonds (auctions, if any, would show on dashboard)
Click on ‘Bid’ button and go to ‘Bid Entry’
Then one should pay for the bid (min bid amount is Rs 1,000)
Click ‘Submit’
New webpage with payment options will show up
Confirmation of payment, once done, will arrive on email and SMS
Bonds will be allocated to RBI retail direct account after auction period is over.

One can also buy RBI floating rate saving bond through bank website/app, or by visiting a bank branch. The actual steps to buy these bonds from the website/app of banks will differ from bank to bank. Usually these steps are menu driven and quite simple.