The RBI has kept the FRSB interest rate unchanged for the period from January to June 2025.

Banking & Finance

In January 2025, the Reserve Bank of India (RBI) announced that the interest rate for the RBI Floating Rate Savings Bonds (Taxable) FRSB 2020 (T) for the period from January 1 to June 30, 2025, will remain at 8.05%. This rate includes the National Savings Certificate (NSC) rate of 7.70% plus an additional spread of 0.35%.


      - The interest rate on RBI FRSB is not fixed; it is adjusted every six months based on the interest rate of the NSC.

      - Interest earned on RBI FRSB is taxable, and no tax deductions are available for the investment. Tax Deducted at Source (TDS) will apply if the annual interest exceeds Rs.10,000.

     

Main Point :-   (i) The bonds require a minimum investment of Rs.1,000, with additional investments in multiples of Rs.1,000. There is no upper limit for the investment, and the bonds cannot be pledged as collateral for loans.

      (ii) The RBI FRSB has a lock-in period of seven years and does not allow early withdrawal, except for senior citizens.

(iii) Seniors can withdraw early with a penalty after a minimum lock-in period: six years for those aged 60-70, five years for those aged 70-80, and four years for those aged over 80.
About RBI

Governor : Sanjay Malhotra
Headquarter : Mumbai
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