RBI Floating Rate Savings Bonds

Features & Benefits of RBI 8.05% Floating Rate Savings Bond 2020 (Taxable). The Government of India has announced, with effect from 01 July 2023 and effective until 31 Dec 2023, to issue Floating Rate Savings Bonds (Taxable) 2020 to enable resident citizens /Minors / HUF to invest in a taxable bond without any upper monetary limit. (These very popluar RBI Floating Rate Savings Bond 2020 replaced the very very popular  7.75% Savings Bond 2018)

Type of Bond

8.05% RBI Floating Rate (until 31Dec2023) Savings Bonds  2020 ( Taxable )

Investment Period

7 years from from the date of issue.

Current Coupon (% p.a.)/ Interest Rate i.e Floating Interest Rate.

8.05% p.a., i.e. based on National Savings Certificate (NSC) rate (Base rate) + 35bps (6.80% + 0.35%) for period 1st July – 31st Dec 2020.

The Interest rate remain unchanged , 7.15% p.a. for  01 Jan 2021 to 30 June 2021 at 7.15 % p.a.  

Interest payable and reset criteria

Payable on 1st Jan, 2021. The coupon/interest of the bond will be reset half yearly based on NSC rate (Base rate) + 35bps.

Half-yearly interest is payable on 1st January / 1st July in the investor’s bank account .

Issue Opens on

01.07.2020

Safety

GoI bonds are issued by RBI. They are sovereign in nature & absolutely safe,100% risk free investment. Higher interest than most deposits schemes, with Sovereign Guarantee.

Minimum Investment

Rs. 10000/- 

Maximum Investment Rs.

No maximum limit on investment.

TDS /Taxation

Interest Taxable, Income Tax Act 1961. The bonds will be exempt from Wealth-Tax under the Wealth-Tax Act, 1957.

Form of the Bonds:

Application to be done in physical mode. Bonds will be issued in Electronic form, held in the Bond Ledger Account (BLA). BLA will be opened by the Receiving Office in the name of investor/s. A certificate will be issued to all  investors for each deposit.

Transferability

The Bonds are non-transferable, non-negotiable and cannot be Offered as a security for any loan or advance. Transferability ( Transmission bonds ) is limited to nominee(s)/legal heir ( Resident Indian & NRI is allowed ) in case of death of holder.

Maturity / Redemption AMT (Rs. Per bond)

Amount will be credited to your Bank A/c directly. No Need to surrender Bond Certificate. No Signatures required on the Maturity Date

Cheque / Draft to be drawn in the name of

“HDFC Bank RBI Floating Rate Saving Bond 2020 (Taxable) ”

Interest payment Mode

Interest payment will be made ONLY  by NEFT / RTGS etc.

Need to open new / separate bank a/c or demat a/c

New or separate bank account is not require for RBI Floating Rate Savings Bonds 2020, Any Bank cheque can be use for investments. Demat A/c not require for investments in FRSB 2020.

Premature redemption / withdrawal facility for Senior Citizens: 

Yes, allowed subject to penalty charges equivalent to 50% of last coupon/interest payment:

·    for investor in the age bracket of 60 to 70 years after 6 years,

·    for investor in the age group of 70-80 after 5 years and

·    for investor in the age exceeding 80 years would be after 4 years from the date of issue.

Who are eligible to invest in RBI Floating Rate Savings Bond 2020?

·     

·    An Individual, (not being a Non Resident Indian)

·    In his or her individual capacity or

·    In individual capacity on joint basis or anyone or survivor basis

·    On behalf of a minor as father/mother/legal guardian

·    A Hindu Undivided Family (HUF) , Documentation Required

Who does NOT eligible to invest in RBI Floating Rate Savings Bond 2020?

Following are not eligible to invest in Bonds :- Non Resident Individual (NRI) /  Banks / Sole Proprietorship /  Partnership Firms / LLP / Companies including group companies / Family trusts / Charitable and Religious Trusts, /  Association of Persons, / Co- operative Societies ,etc.

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