Rate Adaptive Yields

Floating Rate Bonds

Protect your portfolio from inflation. Invest in floating-rate bonds whose yields adjust dynamically to reference benchmark interest movements.

Adaptive Coupon Rates

Yield interest adapts upward automatically when benchmark policy rates rise, protecting against rate drop worries.

RBI Floating Rate Bonds

Invest in 100% secure FRSB issues carrying a sovereign coupon rate pegged to national small savings scales.

Inflation Protection

Unlike standard fixed-rate instruments, floating-rate bonds hedge your capital during active inflation cycles.

FRSB Bonds

Sovereign FRSB Guidelines

The RBI Floating Rate Savings Bond (FRSB) 2020 carries an interest rate pegged 0.35% above the NSC rate. Interest is reset every 6 months (January 1st and July 1st) and paid out semi-annually.

✔ No maximum investment ceiling
✔ Tenure structure of 7 years
✔ Secure digital bank-app execution

Asset Dynamics

Why Floating Rate Bonds?

During periods of economic recovery, central banks raise repo rates. Floating-rate bonds are key instruments to exploit this pattern:

Eliminating Interest Rate Risk: Fixed-rate bonds lose value when market interest rates rise. Floating-rate bonds avoid this by matching coupon resets.
Predictable Reset Timings: Coupon adjustments are executed on pre-determined dates (monthly, quarterly, or semi-annually) based on prospectus rules.
Sovereign & Corporate Safety: Choose between Government FRSBs or corporate issues with strong ratings like AAA/AA+.

FAQs

Frequently Asked Questions

Find immediate answers regarding floating rate bonds.

What are floating rate bonds?

Floating rate bonds are debt securities where the interest payouts (coupon rates) are not fixed. Instead, they reset periodically based on benchmark interest rates, such as the repo rate or small savings scheme yields.

How does the RBI Floating Rate Savings Bond (FRSB) calculate interest?

The interest rate on the RBI FRSB is linked to the National Savings Certificate (NSC) rate. The coupon payout is set at the prevailing NSC rate plus a premium of 0.35%. Payout rates are reset twice a year, on January 1st and July 1st.

What is the lock-in period for RBI Floating Rate Bonds?

RBI Floating Rate Savings Bonds carry a lock-in maturity of 7 years from the date of issue. However, premature withdrawal options are permitted for senior citizen investors (aged 60 and above) subject to minimum holding rules.