Given the sharp fluctuations in the Indian market, most investors want guaranteed returns with low risk. For such investors, RBI Floating Rate Savings Bonds (FRSB) may be a better option. The interest rate of these bonds is always maintained 0.35% higher than the interest rate of the National Savings Certificate (NSC).
For example, if NSC scheme gives 7% interest per annum, then FRSB will give 7.35% interest. Currently, the interest rate of FRSB is 8.05% per annum. As its name suggests, this bond is based on a variable rate. This means that the interest rate changes every six months. This is directly linked to the evolution of the debt market. Although the fluctuations in this market are less.
Who is RBI Floating Rate Savings Bond suitable for?
Looking for a secure and regular income: this bond is suitable for investors who want to avoid market risk and who need a regular income. Retirees, Senior Citizens: This is a better option as a retirement plan for retirees and senior citizens as it earns interest every six years. month. Long-term investors: FRSB is a good option for those who want long-term fixed income.
How to buy RBI Floating Rate Savings Bonds? These bonds can be purchased from RBI’s direct website, banks’ app/site, bank branch or post office. PAN is required, minimum investment is around 1000 and maximum investment is unlimited.
7-year retention period: These bonds cannot be repaid before 7 years. However, investors aged 60 to 70 can redeem early after 6 years. Investors aged 70-80 can early redeem after 5 years and investors over 80 can early redeem after 4 years. But a penalty must be paid. Government Guarantee: FRSB interest rates change every six months. If interest rates rise, you will get higher returns. Apart from that, this bond comes with a government guarantee, so the risk is negligible.