RBI Floating Rate Savings Bonds (FRSB)

1. Issue and Subscription Process:
The Reserve Bank of India issues the FRSBs from time to time.
They are usually distributed to the general public through state-owned banks and post offices. Subscriptions can be taken by investors online via banking, or through branches, and post offices.
The bonds can be subscribed to by individual investors, HUFs, and trusts.
2. Interest Determination and Service
Interest rate of every calendar year is determined according to the applicable BPLR prevailing at the time and the spread.
For example, if BPLR is 7% and the spread is 0.75% then for the same year it will float to 7.75%
Every 6 months the rate changes so for a change in the BPLR the interest will change thus providing an opportunity of gain when there will be a market-related rise in interest rates
3. Redemption
The period is 7 years and cannot redeem the bonds within that tenure.
At maturity, the principal amount together with the interest that has been piling up in due course of time is returned to the investor.
4. Nomination Facility:
An investor can nominate a person or a group of persons for receiving the redemption proceeds of the bonds in case of his death. This makes it handy and safe for families.