Back
What Are RBI Bonds?
RBI Bonds, formally known as Floating Rate Savings Bonds (FRSB) 2020 (Taxable), are a secure way for you to lend money to the government. In exchange for your investment, the Government of India pays you a competitive interest rate that adjusts over time.
Why They Are the Safest Way to Save
These bonds carry a Sovereign Guarantee, meaning the Government of India is the borrower. They are 100% safe, making them a "risk-free" investment compared to private bank deposits or corporate bonds. Your principal and interest are fully protected.
How the Interest Rate Works (Floating Rates)
The interest rate is not fixed for the entire 7-year term. Instead, it "floats" and is reset every six months (on January 1st and July 1st).
- The Formula: The rate is linked to the National Savings Certificate (NSC) + a spread of 0.35%.
- Current Rate (Early 2026): 8.05% per annum (valid until June 30, 2026).
- Payout: Interest is paid semi-annually directly into your bank account.
Who Can Buy RBI Bonds Online?
Eligibility is broad for Indian residents, but there are strict exclusions for non-residents.
- Individuals: Any resident Indian acting in an individual capacity.
- Joint Holders: Can be held jointly by two or more individuals.
- Minors: Parents or legal guardians can buy bonds on behalf of a minor.
- HUF: Hindu Undivided Families are eligible.
- Exclusion: Non-Resident Indians (NRIs) are strictly prohibited from investing in these bonds.
Two Main Ways to Buy RBI Bonds Online
Option 1: Using the RBI Retail Direct Portal (Direct Method)
This is the official platform provided by the Reserve Bank of India. It allows you to maintain a Retail Direct Gilt (RDG) Account, giving you direct access without any intermediate fees.
Option 2: Using Your Bank's Net Banking (Indirect Method)
Major authorized banks (SBI, HDFC, ICICI, Axis, etc.) allow you to purchase these bonds via their "Investments" or "e-Services" section. This is often the most convenient choice if you already have an active net banking account.
How to Buy: Step-by-Step
via RBI Retail Direct Portal
- Register: Visit the RBI Retail Direct website.
- Video KYC: Complete a digital verification by showing your original PAN Card on a video call.
- Invest: Once approved, log in, select "Floating Rate Savings Bonds," and enter the amount (Minimum: ₹1,000).
via Major Banks (SBI, HDFC, ICICI)
- Log in: Open your Bank’s Net Banking portal or Mobile App.
- Navigate: Go to Investments > RBI Savings Bonds.
- Apply: Fill in the nominee details and the amount.
- Confirm: Authenticate with an OTP to deduct funds directly from your savings account.
Important Things to Know Before You Buy
The 7-Year Lock-in Period
The maturity is 7 years from the date of issue. Unlike other government securities, these bonds are non-tradable and non-transferable, and you cannot use them as collateral for a loan.
Senior Citizen Exceptions:
- 60–70 years: Lock-in period is 6 years.
- 70–80 years: Lock-in period is 5 years.
- 80+ years: Lock-in period is 4 years.
Tax Rules on Bond Interest
- Taxable: Interest is added to your total income and taxed as per your income tax slab.
- TDS: Tax will be deducted at source (TDS) if the interest exceeds ₹10,000 per year.
- Wealth Tax: These bonds are exempt from Wealth Tax.
Comparison Summary
| Feature | RBI Floating Rate Bonds | Bank Fixed Deposits (FDs) |
|---|---|---|
| Safety | Sovereign Guarantee (Highest) | Insurance up to ₹5 Lakhs |
| Interest Rate | 8.05% (Floating) | Usually 6.5% - 7.5% (Fixed) |
| Tenure | Fixed 7 Years | Flexible (7 days to 10 years) |
| Liquidity | Restricted (Lock-in) | High (with penalty) |
Summary Checklist for New Investors
- Documents: Keep your PAN, Aadhaar, and a cancelled cheque ready.
- Bank Link: Ensure your Aadhaar is linked to your active mobile number.
- Minimum Fund: Have at least ₹1,000 available for investment.
- KYC: Complete the Video KYC during banking hours (usually 10 AM – 5 PM).
- Tax Slab: Factor in that interest income is fully taxable at your marginal rate.
