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Floating Rate Savings Bonds, 2020 (Taxable) are RBI Bonds, Sovereign guaranteed by the Government of India. RBI Bonds are bonds backed by the Government of India. These bonds are issued to raise funds to finance long-term lending, economic development, etc of the country. These bonds are non-transferable and cannot be sold before maturity. These bonds are similar in all terms to their previous counterpart GOI (Taxable) Savings Bonds except that they now have a floating rate attached to them and are only available as non-cumulative bonds with interest payable half-yearly. Interest Rate earned on these bonds is taxable and their rate is to be changed every 6 months starting January 2021 and would be 0.35% above the rate of interest of the National Savings Certificate (NSC). The tenure of the bond is 7 years. The bonds shall be repayable on the expiration of seven years from the date of issue. Premature redemption shall be allowed for specified categories of senior citizens.


Commencement Date 
1 July 2020
Bond Type 
Rate of Interest
@7.15% per annum
Premature Encashment
Allowed for Senior Citizens*

But note that there’s a minimum lock-in period even for premature encashment is defined as under:

  • Age bracket: 60 – 70 years; lock-in-period of 6 years from the date of issue

  • Age bracket: 70 – 80 years; lock-in-period of 5 years from the date of issue

  • Age bracket: 80 years & above; lock-in-period of 4 years from the date of issue

Submission of Forms: (I)HDFC Bank Limited     (2) ICICI Bank Limited

Eligibility: The Bonds are open to investment by individuals [including joint holdings, minor (guardian on behalf of minor)] and HUFs.

Note : NRIs are not eligible for making investments in these Bonds

Subscription: Subscription to the bonds will be in the form of cash (up to Rs. 20,000/- only)/drafts/cheques or any electronic mode acceptable to the Receiving Office.

Form of the Bonds: The Bonds will be issued only in the electronic form and held at the credit of the holder in an account called Bond Ledger Account (BLA), opened with the Receiving Office.

Tenure: The tenure of the Bond will be 7 years from the date of issuance. Premature redemption shall be allowed for specified categories of senior citizens.

Frequency of Interest Payment: The interest on the bonds will be payable at half yearly intervals viz., January 1 st  and July 1 st  every year.

Transferability: The Bonds in the form of Bond Ledger Account shall not be transferable except transfer to a nominee(s)/legal heir in case of death of the holder of the bonds.

Tax treatment: Interest on the Bonds will be taxable under the Income-tax Act, 1961 as amended from time to time and as applicable according to the relevant tax status of the Bond holder.

Tradability/Advances: The Bonds shall not be tradable in the secondary market and shall not be eligible as collateral for loans