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Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T) (updated as on April 02, 2026)

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 electronic form in Bond Ledger Account (BLA) with the Receiving Office 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.

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

Nature of payment Rate
Brokerage* 50 paise per ₹100 of the subscription amount mobilized
Handling Charges 1/16th of 1% of the subscription amount mobilized
Turnover Commission 7 paise per ₹100 on interest paid, principal amount repaid in respect of the accounts held under BLA
Service Charges ₹25 per every new BLA opened and ₹20 for the existing BLA
* Receiving offices are required to share at least 50% of the brokerage 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)

What are the guidelines on nomination for FRSB 2020(T)?

  • Only a resident / Non-Resident Indian (NRI) can be nominated by the applicant / investor. Overseas Citizen of India (OCI) is not permitted to be a nominee for the bond.
  • In case the applicant / investor has specified more than one nominee, Receiving Offices may obtain from him / her the amount-wise allocation for transfer of the investment amount among the nominees, such that each nominee would receive the minimum amount of ₹1,000/- (Face Value) and in multiples of ₹1,000/- thereafter, in the event of death of the investor. 
  • In case the investor has invested the minimum amount of 1,000/- (Face Value), he / she can nominate only one nominee. 


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

Reserve Bank of India. (2026, April 02). 'Floating Rate Savings Bonds, 2020 (Taxable) - FRSB 2020 (T) - Operational Guidelines'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13365&Mode=0


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