RBI Bonds, specifically the RBI Floating Rate Savings Bonds, are government-backed debt instruments issued by the Reserve Bank of India, designed to provide a safe and attractive investment option for individual investors, especially those seeking stable returns and capital protection.
Key Features and Structure
Interest Rate: The standout feature of RBI Floating Rate Savings Bonds is their variable interest rate, which is reset every six months. For 2025, the interest rate is 8.05% per annum, making these bonds highly competitive among debt investments1. The rate is pegged to the National Savings Certificate (NSC) rate, with an additional spread of 0.35%. This ensures the bond’s returns remain responsive to prevailing market conditions, rising or falling in line with the NSC rate.
Tenure and Liquidity: The bonds have a fixed tenure of seven years. However, senior citizens benefit from early withdrawal options: those aged 60–70 can redeem after six years, 70–80 after five years, and those 80 and above after four years. For other investors, premature withdrawal is not allowed.

• Investment Limits and Accessibility: The minimum investment amount is ₹1,000, with no upper limit, making them accessible to a wide range of investors. The bonds are issued in electronic form (Bond Ledger Account), ensuring safety and convenience.
  Taxation and Transferability: Interest earned is fully taxable as per the investor’s income tax slab. The bonds are non-transferable (except to a nominee or legal heir in case of the holder’s death), non-tradable in the secondary market, and cannot be used as collateral for loans.
  Suitability and Process
  RBI Bonds are particularly popular among conservative investors and retirees seeking regular, predictable income and capital safety. Senior citizens, in particular, find these bonds attractive due to the higher interest rate and flexible early withdrawal provisions1. To invest, individuals must complete KYC formalities and submit the required documents, including PAN and address proof, at designated bank branches.
  In summary, RBI Floating Rate Savings Bonds offer a government-guaranteed, flexible, and market-linked investment avenue, balancing safety with competitive returns, especially suitable for risk-averse and retirement-focused investors.