The Reserve Bank of India (RBI) has unveiled a Floating Rate Savings Bond (FRSB) maturing in 2034, offering an 8% interest rate that adjusts every six months based on market conditions. The bond’s rate is derived from recent Treasury Bill auctions, ensuring it reflects current market yields. With a maturity period of seven years, these bonds provide a safe investment option backed by the Indian government. Interest is paid semi-annually, appealing to conservative investors seeking assured returns. However, they lack inflation protection and cannot be traded, offering limited flexibility. Pre-mature encashment is permitted with penalties for senior citizens after a minimum lock-in period.
RBI Introduces Floating Rate Savings Bond 2034 with 8% Interest
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