Skip to main content

Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T)

Reserve Bank of India (RBI) has reset the half-yearly interest rate for Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T).

Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T)

Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T) are the bonds issued by the Government of India with effect from July 01, 2020.

Sellers and investors of FRSB 2020 (T)

FRSB 2020 (T) are sold through ‘Receiving Offices’ such as State Bank of India, Nationalised Banks, four private sector banks and any other entity as authorised by RBI.

FRSB 2020 (T) can be held by –

  • A person resident in India – in individual / joint capacity or on behalf of a minor
  • Hindu Undivided Family (HUF)

Subscribing to FRSB 2020 (T)

  • FRSB 2020 (T) are issued at face value of ₹100/-.
  • The minimum investment in FRSB 2020 (T) shall be ₹1,000/- and thereafter in multiples of ₹1,000/-.
  • There is no maximum limit for investment in FRSB 2020 (T).

Tenor of FRSB 2020 (T)

  • FRSB 2020 (T) are repayable on expiry of 7 years from the date of issue.
  • Premature encashment of FRSB 2020 (T) is allowed for individual investors in the age group of 60 years and above after minimum lock-in period as below –

Age of the investor Minimum lock-in period from the date of issue
60 to 70 years 6 years
70 to 80 years 5 years
80 years and above 4 years

  • In case of joint holders or more than 2 bond holders, any one of the holders shall fulfil the above conditions.
  • After the minimum lock-in period, an eligible investor can surrender the bonds at any time but the redemption payment is made on the following interest due date (i.e. 1st July or 1st January) and 50% of the interest due and payable for the last 6 months of the holding period is recovered.

Payment for FRSB 2020 (T)

Payments for FRSB 2020 (T) can be made through cash (up to ₹20,000) / cheque / demand drafts / electronic banking. 

Financial benefits of holding FRSB 2020 (T)

  • The interest on FRSB 2020 (T) is paid at half-yearly intervals on 1st July and 1st January. 
  • The coupon / interest rate of FRSB 2020 (T) is reset on half-yearly basis on 1st July and 1st January and is linked / pegged with prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate.
  • The interest on FRSB 2020 (T) is taxable under Income Tax Act, 1961 as per the tax status of the bond holder.

Holding FRSB 2020 (T)

FRSB 2020 (T) can be held in Bond Ledger Account (BLA) or Retail Direct Gilt (RDG) Account with RBI.

Transfer / trading of FRSB 2020 (T)

  • FRSB 2020 (T) held in BLA are not transferable.
  • FRSB 2020 (T) are not tradable in the secondary market.
  • FRSB 2020 (T) are not eligible as collateral for availing loans from banks, financial institutions and Non-Banking Financial Companies.

Commission to Receiving Offices for distribution of FRSB 2020 (T)

Commission for distribution of FRSB 2020 (T) is paid at the rate of 0.5% of the total subscription received by the receiving offices and receiving offices are required to share at least 50% of the commission so received with the agents / sub agents for the business procured through them.

Forms relating to FRSB 2020 (T)

  • Certificates of Holding (Form A) issued to the subscriber
  • Applications (Form B)
  • Nomination request (Form C) or cancellation of existing nomination (Form D)

Reset of FRSB 2020(T) coupon / interest rate

The coupon rate on FRSB 2020 (T) for the period July 01, 2024 to December 31, 2024 and payable on January 1, 2025 remains at 8.05% (7.70%+0.35%), unchanged from the previous half-year.


References

Government of India. (2020, June 26). 'Notification - Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T)'. Retrieved from https://rbidocs.rbi.org.in/rdocs/content/pdfs/GOI26062020.pdf

Reserve Bank of India. (2023, October 23). 'Subscription to Floating Rate Savings Bonds, 2020 (Taxable) through RBI Retail Direct Portal'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=56614

Reserve Bank of India. (2024, July 01). 'Rate of Interest on Floating Rate Savings Bond, 2020 (Taxable) – FRSB 2020(T) for the Period July 01, 2024 – December 31, 2024'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58200


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

National Strategy for Financial Inclusion (NSFI) 2025-30

Reserve Bank of India (RBI) has published National Strategy for Financial Inclusion (NSFI) 2025-30. Financial Inclusion The Committee on Financial Inclusion (Chairman: Dr C Rangarajan, RBI, 2008) defined financial inclusion as “the process of ensuring access to financial services, timely and adequate credit for vulnerable groups such as weaker sections and low-income groups at an affordable cost”. The Committee on Medium-Term Path to Financial Inclusion (Chairman: Shri Deepak Mohanty, RBI, 2015) viewed financial inclusion as, “convenient access to a basket of basic formal financial products and services that should include savings, remittance, credit, government-supported insurance and pension products to small and marginal farmers and low income households at reasonable cost with adequate protection progressively supplemented by social cash transfers, besides increasing the access of small and marginal enterprises to formal finance with a greater reliance on technology to cut costs an...
Post a Comment
Read more

RBI’s Monetary Policy (December 05, 2025): In A Nutshell

The bi-monthly monetary policy of Reserve Bank of India (RBI) was announced on December 05, 2025. Here are some of the highlights of the monetary policy announcement. Rates   Change Rate Policy repo rate Reduced by 25 bps 5.25% Standing deposit facility (SDF) rate 5.00% Marginal standing facility (MSF) rate 5.50% Bank rate 5.50% Monetary policy stance Monetary policy stance unchanged as ‘neutral’. Domestic Economy  Real Gross Domestic Product (GDP) growth accelerated to 8.2% in Q2, buoyed by strong spending during the festive season which was further facilitated by the rationalisation of the goods and services tax (GST) rates.  Real GDP growth for 2025-26 is projected at 7.3%. For the first time since the adoption of flexible inflation targeting (FIT), average headline inflation for a quarter at 1.7% in Q2, breached the lower tolerance threshold (2%) of the inflation target (4%). It dipped further to an all-time low of 0.3% in October 2025. The underlying inflation pressu...
Post a Comment
Read more

Export / Import of Currency and Possession / Retention of Foreign Currency

Reserve Bank of India (RBI) has updated the guidelines on export and import of currency. What are the guidelines on export and import of Indian currency? Transferor Transfer from Transfer to Nature of currency Maximum limit Person resident in India India Countries other than Nepal and Bhutan Currency notes of Government of India (GoI) and RBI notes ₹25000 per person Commemorative coins 2 coins Person resident in India gone out of India on temporary visit, on his return Countries other than Nepal and Bhutan India Currency notes of GoI and RBI notes ₹25000 per person Person resident outside India (not citizen of Pakistan / Bangladesh) visiting India India Any country Currency notes of GoI and RBI notes ₹25000 per person Any country India Person (not citizen of Pakist...
Post a Comment
Read more

Rupee Interest Rate Derivatives

Reserve Bank of India (RBI) has issued directions on rupee interest rate derivatives. What is Interest Rate Derivative (IRD)? Interest Rate Derivative (IRD) means a financial derivative contract whose value is derived from one or more Rupee interest rates, prices of Rupee interest rate instruments, or Rupee interest rate indices. To which transactions shall the directions be applicable? The directions shall be applicable to Rupee IRD transactions undertaken in the over-the-counter (OTC) market and on recognised stock exchanges in India. Forward Contracts in Government Securities shall be undertaken in the OTC market in terms of the Reserve Bank of India (Forward Contracts in Government Securities) Directions, 2025, dated February 21, 2025. Who are eligible participants in IRD markets? Resident Non-resident, through its central treasury or its group entity, where applicable.  What are the directions on trading of IRDs on recognised stock exchanges? A recognised stock exchange is per...
Post a Comment
Read more

Systematically Important Banks (SIBs)

Some banks are identified as systematically important and are subjected to higher capital requirements. When are banks termed as systematically important? What are the additional capital requirements for such banks? And which are the systematically important banks in India? What are Systematically Important Banks (SIBs)? Systematically Important Banks (SIBs) are perceived as banks that are ‘Too Big To Fail (TBTF)’.  Why additional policy measures are required for SIBs? The perception of TBTF creates an expectation of government support for these banks at the time of distress. Due to this perception, these banks enjoy certain advantages in the funding markets. However, the perceived expectation of government support amplifies risk-taking, reduces market discipline, creates competitive distortions, and increases the probability of distress in the future. These considerations require that SIBs should be subjected to additional policy measures to deal with the systemic risks and moral ...
Post a Comment
Read more