RBI Floating Rate Savings Bonds 2020 (Taxable) are among one of the lowest risk investment options as they are backed by the government of India. The bond offers an 8.05% interest rate at present and the rate is determined by the National Savings Certificate interest rate+ 35 bps. Investors in India find it as an attractive investment option where they can get a high interest rate at a low risk. But, can Non-Resident Indians (NRIs) also invest in RBI floating rate bonds? Here's everything you need to know about eligibility, interest rates, tenure, taxation, and other key features of RBI Floating Rate Savings Bonds.

An individual, not being a non-resident Indian-(a) in his or her individual capacity, or (b) in individual capacity on a joint basis, or (c) in individual capacity on any one or survivor basis, or (d) on behalf of a minor as father/mother/legal guardian can invest in RBI floating rate bond. A Hindu undivided family can also invest in the bond.

No, NRIs are not eligible to invest in RBI Floating Rate Savings Bonds. However, if the holder becomes an NRI during the holding period of the bond, they can continue holding their RBI floating rate bond investments, as per the RBI Direct website. In such a condition, the repatriability of interest/maturity proceeds will be subjected to the provisions of Foreign Exchange Management Act (FEMA) guidelines, the website further says.

The RBI floating rate savings bond interest rate is set at a 0.35% premium over the NSC rate. Since the NSC interest rate is 7.7%, the interest rate of the RBI floating rate bond is 8.05% (7.7%+0.35%).

In a statement dated July 1, 2026, the RBI said, “The coupon rate on FRSB 2020 (T) for the period July 1, 2026, to December 31, 2026, and payable on January 1, 2027, remains at 8.05% (7.70%+0.35%), unchanged from the previous half-year.”

The tenure of the bond is 7 years from the date of issue. No interest will accrue after the maturity of the bond. Premature redemption facility is allowed for investors in the age group of 60 years and above, as per RBI rules.

The interest income from the bonds is taxable. TDS (Tax Deducted at Source) is deducted at the time of interest payment as per the prevailing income tax rules.

Minimum and maximum limit for investment in RBI Floating Rate Savings Bonds (Taxable)
The RBI bonds are issued for a minimum amount of Rs 1,000/- (face value) and in multiples thereof. There is no maximum limit for investment in bonds.

Interest is payable semi-annually from the date of the issue of the bonds, up to June 30 /December 31 as the case may be, and thereafter half-yearly for a period ending June 30 and December 31 on July 1 and January 1, respectively.
Note that RBI Floating Rate Savings Bonds (Taxable) are not transferable.
As per the SBI website, “The bonds are not tradeable in the secondary market and are not eligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions.”