The interest for this half-year period will be payable on January 1, 2027.
According to the government notification issued under Para 13(ii) of the scheme guidelines dated June 26, 2020, the coupon rate on the bond is reset every six months.
The rate is linked to the prevailing National Savings Certificate (NSC) interest rate with an additional spread of 35 basis points (0.35%).
For the current half-year cycle, the NSC interest rate remains at 7.70%. After adding the 0.35% spread, the effective interest rate on the bond continues at 8.05%. The rate is unchanged from the previous January–June 2026 period.
What is the Floating Rate Savings Bond?
The Floating Rate Savings Bond, introduced in 2020, is a government-backed investment option designed mainly for retail investors seeking secure and stable returns. Unlike fixed-rate instruments, the interest rate on these bonds changes every six months depending on the benchmark NSC rate.
The formula used to calculate the return is:
FRSB Rate = NSC Rate + 0.35%
Since the NSC rate currently stands at 7.70%, the applicable bond rate remains 8.05%.
Why has the rate remained unchanged?
The government has not revised the NSC interest rate for the current quarter. As the benchmark rate remains stable, the coupon rate on the Floating Rate Savings Bond has also remained unchanged.
Why is this important for investors?
The announcement is significant for conservative investors and senior citizens who rely on fixed-income instruments for regular earnings. At 8.05%, the bond continues to offer relatively attractive returns among government-backed savings options.
The bonds are fully backed by the Government of India, making them a low-risk investment avenue. However, the interest earned is taxable as per the investor’s income tax slab.
Interest on the bonds is paid semi-annually, with the next payout scheduled for January 1, 2027.
First Published: Jul 3, 2026 7:38 AM IST
