Latest news with #FloatingRateSavingsBonds
Time of India
6 days ago
- Business
- Time of India
From NPS and mutual funds to FRSB: Why diversification is key in investing today
The Indian equity markets have seen explosive growth over the last decade, fuelled by a vibrant startup ecosystem, robust policy overhaul and massive investments in infrastructure. However, as uncertainties return to global markets triggered by a near paralysis in global trade, equities have taken a massive hit. This has reignited the conversation on the need to protect investor return and wealth by incorporating fixed income securities, such as fixed deposits and bonds, in their this shift in the investment environment, digital platforms today offer curated investment baskets to balance your portfolios by giving you exposure to not only equities but a plethora of debt or fixed income instruments. Stock Holding Corporation of India, offers access to a basket of investment instruments, which serves as a one-stop solution for portfolio diversification needs. On offer are government-backed schemes such as the National Pension System (NPS) as well as Floating Rate Savings Bonds (FRSBs), mutual funds and corporate is this important? After the US imposed massive reciprocal tariffs on its biggest trading partners, including India, the Indian equity market, similar to its global counterparts, went into an acute and sustained downward spiral and has since experienced heightened volatility, prompting investors to seek more stable investment avenues. With equities taking a dive, investors veered towards the only safe haven—debt or fixed income need of the hour then is to temper the growth that equities provide with the stability and predictability that fixed income securities fact that the Indian market regulator sees debt assets as a critical component of any portfolio and wants to popularise it is evident from the Securities and Exchange Board of India's (SEBI) decision to reduce the minimum investment threshold in privately placed bonds to Rs 10, the average Indian investor, debt instruments mean fixed deposits. Fixed deposits have been the poster child for safe, risk-free returns for decades. However, while FDs are safe, their returns manage to even out with inflation, making wealth creation investors seek alternatives that offer stability without compromising returns, other fixed income assets such as bonds, FRSBs, and hybrid modes, including mutual funds and the National Pension System (NPS), have stepped in as a viable solution, making diversification a key strategy for times of market volatility, NPS stands out as a government-backed retirement solution that offers Indian investors a stable avenue for portfolio diversification. This tax-efficient pension programme allows you to systematically build a retirement corpus while offering exposure to different asset classes, including equities, corporate bonds, and government scheme's multi-tiered investment approach lets you customise your asset allocation based on your risk appetite, with conservative investors able to increase their fixed income exposure for stability during turbulent market National Pension System offers two accounts to investors—Tier 1 and Tier 2. Tier 1 accounts are mandatory for investors, and it has a minimum contribution of Rs 500. The main attraction of Tier 1 accounts is the tax savings that they offer to their investors. Investors availing the scheme can claim tax savings up to Rs 1.5 lakhs under section 80CCD. Tier 2 accounts are voluntary and offer no tax savings benefits. Unlike Tier 1 accounts, the minimum contribution that investors have to make for Tier 2 accounts is Rs a stand-alone Point of Presence (POP) in the NPS architecture, Stock Holding Corporation of India Ltd (StockHolding) offers expert guidance in selecting the most suitable Pension Fund Manager and Annuity Service funds offer retail investors a straightforward path to diversification during uncertain market conditions, combining professional expertise with accessibility. These investment vehicles pool money from multiple investors to create portfolios managed by financial experts who make the complex decisions about when and where to makes mutual funds especially valuable for weathering volatility is their ability to offer customised risk profiles to match your comfort level. Conservative hybrid funds with higher debt allocations can provide stability when equity markets fluctuate, while still offering better potential returns than pure fixed-income the systematic investment plan (SIP) approach allows you to invest small amounts regularly, taking advantage of market dips through rupee-cost averaging. This disciplined method helps build wealth steadily while potentially reducing the anxiety of trying to time unpredictable market offers various fixed-income products like FDs, NCDs, Secondary market bonds which enables investors to evaluate options that align with their personal tax profile, return expectations, and liquidity Bank of India's Floating Rate Savings Bonds, 2020, (Taxable) are government-backed securities that feature interest rates that adjust periodically based on prevailing market rates, providing a natural hedge against inflation and interest rate fluctuations. With no investment cap and a seven-year tenure, these bonds are ideal for those seeking the average investor concerned about market volatility, these bonds offer the dual benefit of capital preservation with the potential for increasing returns when interest rates rise—a valuable characteristic during times of sustained market Rate Savings Bonds offer an accessible investment option, with a modest entry point of just Rs 1,000 and no ceiling on maximum investment—making them suitable for both small savers and those with substantial more investors realise the importance of structured portfolio allocation, investment will no longer be just about equities but about a balanced, strategic mix of financial instruments designed for long-term StockHolding for more details.
Hans India
09-07-2025
- Business
- Hans India
RBI Floating Rate Savings Bonds 2025: Safe Investment Option With 8.05% Interest
As many banks have been lowering fixed deposit (FD) interest rates, people are now looking for other alternate options to earn money safely. One good option is the Floating Rate Savings Bonds (2020) launched by the Reserve Bank of India (RBI). These bonds give you higher interest than FDs and come with the full safety of the RBI. That means your money is secure. How Do These Bonds Work? The interest rate changes every 6 months. It is linked to the National Savings Certificate (NSC) rate. As of July–December 2025, the bond offers 8.05% interest, which is 0.35% more than NSC. You will get interest twice a year – on January 1 and July 1. Main Features Time period: 7 years Minimum amount: ₹1,000 No upper limit Interest is taxable You can't take out money early, except for senior citizens: Age 60–70: after 6 years Age 70–80: after 5 years Age 80+: after 4 years Who Can Invest? Only Indian citizens and Hindu Undivided Families (HUFs) NRIs cannot invest Great for: Senior citizens Low-risk investors People who don't need the money for 7 years Where to Buy? At any bank branch authorised by RBI On bank websites On the RBI Retail Direct portal KYC documents (ID, address proof) are required Example: If you invest ₹1 lakh at 8.05% interest, you will get around ₹4,000 every 6 months. This interest is taxable, but if you're eligible, you can submit Form 15G or 15H to avoid TDS.
Time of India
04-07-2025
- Business
- Time of India
Why RBI's floating rate savings bond is the best available investing option now for conservative investors
Are RBI Floating Rate Savings Bonds offering more interest than regular bank FDs? Academy Empower your mind, elevate your skills Bank Name Interest Rates (p.a.) Highest interest rate slab currently offered Interest on FD up to 3-year tenure (%) Interest on FD up to 5-10-year tenure (%) % Tenure Axis Bank 6.60 15 months to less than 2 years 6.50 6.50 HDFC Bank 6.60 18 months to less than 21 months 6.45 6.40 ICICI Bank 6.60 2 years 1 day to 10 years 6.60 6.60 Kotak Mahindra Bank 6.60 391 days to 23 months 6.40 6.25 YES Bank 7.10 3 years to less than 5 years 7.10 6.75 Punjab National Bank 6.70 390 days 6.40 6.50 Punjab & Sind Bank 7.05 444 days 6.00 6.35 State Bank of India 6.60 444 days - Amrit Vrishti 6.30 6.05 Union Bank of India 6.85 456 days 6.60 6.40 Bank Name Interest Rates (p.a.) Highest interest rate slab currently offered Interest on FD up to 3-year tenure (%) Interest on FD up to 5-10-year tenure (%) % Tenure ESAF Small Finance Bank 7.60 444 days 6.00 5.75 Jana Small Finance Bank 8.20 5 years 7.75 8.20 slice Small Finance Bank 8.50 18 months 1 day to 18 months 2 days 8.25 7.75 Suryoday Small Finance Bank 8.40 Above 30 months to 3 years 8.40 8.00 Ujjivan Small Finance Bank 7.75 2 years 7.20 7.20 Utkarsh Small Finance Bank 8.25 2 years to 3 years 8.25 7.75 Mind the longer lock-in period Are RBI Floating Rate Savings Bonds better than other investment options like PPF? Small savings scheme Current interest rate Public Provident Fund 7.1% Senior Citizens Savings Scheme 8.20% Post Office Savings deposit scheme 4% Kisan Vikas Patra 7.5% Monthly Income Account 7.4% The safety of government bonds combined with returns that outshine the competition, what more could a conservative investor ask for? On July 01, 2025, the Reserve Bank of India (RBI) revealed that the interest rate for its floating rate savings bond (FRSB) from July to December 2025 will be 8.05%.While these rates on floating rate savings bonds remained unchanged from the January-June 2025 period, at 8.05%, these bonds are currently paying one of the highest interest rates among the safe fixed income reading to find out whether this is the right time to switch from FDs and other small savings schemes such as PPF ( Public Provident Fund ), SCSS ( Senior Citizen Savings Scheme ) and others, and consider investing in the RBI floating rate savings bonds. This is especially relevant for conservative investors who want to earn a bit more than what is currently available through other most cases, yes. According to data from Paisabazaar, most banks offer their highest interest rates on FDs tenured between 2 and 5 years. Interest rates on FDs with terms between 5 and 10 years often fall within the 5-7% example, most major banks such as Axis, HDFC and ICICI offer 6.4-6.6% interest on their FDs tenured between 5 and 10 years. The State Bank of India (SBI) offers 6.05% on its FDs with a term of 5-10 present interest rate offered on the RBI floating rate bonds exceeds even the highest interest rate offered by most banks across all their fixed deposit PaisabazaarInterest rates as of July 2, 2025All FD rates for deposits of less than Rs 3 some small finance banks (SFBs) offer a higher rate on long-term FDs as well. For instance, slice Small Finance Bank offers the highest interest rate of 7.75% on its FDs for 5-10 years. Among other small finance banks, only Suryoday SFB offers the highest interest rate of 8% and Jana Small Finance Bank offers 8.20% on their FDs with a 5-10 year there are only two SFBs which offer above 8% interest on FDs with a long-term tenure of 5-10 PaisabazaarInterest rates as of July 2, 2025All FD rates for deposits of less than Rs 3 these FDs are no match for the RBI FRSB when it comes to safety. While SFB FDs enjoy an insurance cover of Rs 5 lakh, the entire amount of RBI FRSB is backed by the Government of Suresh Darak, Founder, Bondbazaar, 'Given that the bonds are issued by the RBI, they provide the highest safety to investors, more than any fixed deposit available in the market. Moreover, at 8.05%, the returns are higher than bank FDs, which are currently at around 7%. Moreover, we are already in a low interest rate regime given the latest round of repo and CRR cuts. Rates may rise in the future, in which case investors could see higher returns from RBI Floating Rate Savings Bonds since their rates are recalibrated every six months. If investors are comfortable with the lock-in period, they should certainly explore these bonds for their fixed-income investments'.When compared to FDs, the RBI floating rate savings bond scores low on liquidity. This bond has a 7-year lock-in period for people under 60. But, if you look at other small savings schemes, this lock-in period looks shorter less or about the same. For instance, PPF comes with a lock-in of 15 years, while the Senior Citizen Savings Scheme and NSC come with a lock-in period of 5 RBI Floating Rate Savings Bond customers do get some flexibility to liquidate their and super senior citizens have the option to make premature redemption, i.e. redeem their RBI floating rate savings bond before the lock-in period comes to an end, but not without penalties. According to the RBI, investors aged 60 to 70 can redeem their bonds 6 years from the date of investors who are between 60 and 70 can prematurely redeem their RBI floating rate savings bonds 5 years after the date of issue. Super senior citizens, i.e. those aged 80 and above, can redeem their floating rate savings bond after 4 years since the bond was government left the interest rate on most small savings schemes unchanged this time. For National Savings Certificate (NSC), the rates for the July-September quarter stood at 7.7%.Why this matters is that is because the coupon/interest rate of the RBI floating rate savings bonds is pegged to the NSC. The interest rate offered on RBI floating rate savings bonds is always 35 basis points above the prevailing NSC interest rate. The interest on these bonds is paid out twice annually, on January and July the interest rate offered on NSC is currently at 7.7%, the interest rate on the RBI floating interest rate comes to 8.05% (7.7%+0.35%). Though interest rates on Small Savings Schemes are revised quarterly, the next change in RBI FRSB will not happen before January 1, this adds to the overall value of RBI floating rate interest bonds, since even if the government were to bring down the rates for other small savings schemes, including NSC, in the next quarter, investors in this bond can continue to earn relatively higher if the NSC interest rates come down 50 basis points in the next quarter, from the present 7.7% to 7.2%, the RBI FRSB would still yield interest at the rate of 7.55% (7.2%+0.35%), well above the interest offered by regular FDs and other peers. Moreover, you will continue to have the option of getting higher returns when the interest rate cycle turns from Indiapost suggests that between April 2020 and December 2022, NSC rates remained at an all-time, historic low of 6.8%. During this time, most regular bank FDs were offering interest rates between 5 to 5.5%. Even then, the RBI floating rate savings bonds would have yielded interest of 7.15% (6.8%+0.35%), pegging it well above many FD interest rates generally offered by banks on FDs with a tenure of 5-10 the RBI has reduced the repo rate by 1% this year, it may get passed on partially or completely in the small savings schemes sooner or later. For the period starting from January 2026, there may be a reduction in the interest rate offered by the RBI small savings schemes being one of the most popular government schemes, the government is unlikely to go for a significant reduction of 1% to replicate the repo rate reduction by the RBI. Unless that happens, RBI FRSB is likely to offer one of the highest returns among the safe fixed-income investment India PostExplains Vineet Agrawal, Cofounder, Jiraaf (Bond Investment Platform), 'Backed by sovereign guarantee, these 7-year bonds pay interest every January 1 and July 1, making them ideal for conservative investors seeking steady income. With a low entry requirement of Rs 1,000 and no upper investment cap, they're accessible to a broad range of savers.'These bonds clearly outperform typical bank FDs—where rates have been declining—and offer more stability amid uncertain rate cycles, making these bonds reliable tools for capital preservation and guaranteed returns', adds retirement-related, preferred investment options like PPF continue to offer lower interest at 7.1% p.a., along with a 15-year lock-in period. Although at 8.2%, SCSS offers a higher interest rate than the RBI floating rate bond, along with a lower lock-in period of 5 years, the maximum amount you can deposit here is Rs 30 lakh. There are no such investment ceilings under the RBI's floating rate bonds. Hence, senior citizens who have surplus capital to invest after maxing out their SCSS limit can certainly consider RBI floating rate bonds for earning similar interest on their total corpus.
Business Standard
01-07-2025
- Business
- Business Standard
Interest rate on GOI Floating Rate Savings Bond 2020 unchanged at 8.05%
Reserve Bank of India (RBI) has stated that the coupon rate on Floating Rate Savings Bonds or FRSB 2020 (Taxable) for the period July 01, 2025 to December 31, 2025 and payable on January 01, 2026 remains at 8.05%, unchanged from the previous half-year. The coupon/interest rate is set at a spread of (+) 35 bps over the prevailing National Savings Certificate (NSC) by Capital Market - Live News
Time of India
30-04-2025
- Business
- Time of India
Explore how Floating Rate Savings Bonds, 2020 (Taxable) can be a starting point for investment
Live Events A comfortable tenure: With a seven-year maturity period from the date of issue and a special provision for premature redemption for senior citizens, subject to conditions. Steady cash flow: With a floating rate of interest and a half-yearly interest payout, the cash flow can aid in covering fixed expenses. Lower entry point: The minimum investment for this instrument is ₹1,000. There is also no upper limit for investment as compared to similar fixed-return products * (SCSS). This tool empowers individuals to explore its prospects. Such a low entry point is an opportunity for young individuals or even someone close to retirement to park their money. With rising expenses and an upgrade in standard of living, it is vital to have a well-balanced investment portfolio comprising effective tools that can help in the fulfilment of several goals. Finding the right investment avenue can be challenging with the variety of choices one has at their fingertips, but it is crucial to opt for those that contribute to long-term Rate Savings Bonds, 2020 (Taxable) is a tool that empowers individuals to secure their financial resources and make the most out of fluctuating interest rates. These bonds are issued by the Reserve Bank of India on behalf of the Government of India.A person who wishes to invest in the Floating Rate Savings Bonds, 2020 (Taxable) needs to be an Indian resident in his or her individual capacity, in their own name, on a joint basis, or a one-or-survivor basis, parents/ legal guardians on behalf of a minor, or members of a Hindu undivided Rate Savings Bonds, 2020 (Taxable) are debt instruments that offer interest payments, adjusted on the basis of current market rates. Unlike fixed-rate bonds, where the interest remains constant, these offer the advantage of increasing interest payments when market rates rise. This tool offers safe and attractive returns. The interest rate of the bond would be reset half yearly, every 1st of January and 1st of July, and will be linked with the prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate. Currently, it can be availed at an interest rate of 8.05%. Some of the facets of this tool are:Helping one integrate Floating Rate Savings Bond, 2020 (Taxable) in their investment portfolio is Stock Holding Corporation of India Limited, which eases the financial journey of investors across several asset distributes various savings and investment products such as Mutual Funds, Fixed Deposits, Non-Convertible Debentures (NCDs), IPO/ FPOs, 54 EC Capital Gain Bonds, Government of India Bonds(FRSB2020), Secondary Market Bonds and Portfolio Management Services (PMS).With a presence across India and a robust set of branches, StockHolding offers a platform for investors to purchase these bonds, ensuring a smooth application process and adherence to KYC norms, making these opportunities accessible to from Floating Rate Savings Bonds 2020 (Taxable) , the company also offers varied financial products such as mutual funds, demat services, and more. This variety helps investors choose tools according to their risk appetite and life Rate Savings Bonds, 2020 (Taxable) is an option for individuals who are manoeuvring the financial markets' complexities. With fluctuating interest rates and prospects of an income flow, this can be a significant addition to one's financial kitty. With an understanding of how these bonds work and how they can fit into one's life, one can make informed decisions. Investing should be about building for a future that one looks forward to, and these bonds can add to that journey.
