RBI allows retail investors to subscribe to Floating Rate Savings Bonds via its portal
- October 24, 2023
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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RBI allows retail investors to subscribe to Floating Rate Savings Bonds via its portal
Subject : Economy
Section: Monetary Policy
Key Points:
- RBI allows retail investors to subscribe to Floating Rate Savings Bonds via its portal.
- RBI has made the move to expand the basket of investments available to retail investors.
- Already retail investors are allowed to invest in central government securities, treasury bills, state government securities, and sovereign gold bonds through the Retail Direct Portal.
What are Floating Rate Savings Bonds?
- FRSB 2020 (T) are interest-bearing, taxable, non-tradeable bonds, issued by the central government, which are repayable on the expiration of seven years from the date of issue.
- RBI officially pays 35 basis points above the NSC rate, offering an 8.05% interest rate.
- The interest on the bonds will be payable at half-yearly intervals on Jan 1st and July 1st every year. There is no option to pay interest on a cumulative basis.
About RBI-Retail Direct Scheme:
- RBI-Retail Direct Scheme was started in 2021.
- Under the scheme, individual investors are permitted to open a Retail Direct Gilt account with the Reserve Bank of India, using an online portal, through which investments in government Securities can be made in primary and secondary markets
What is Gilt account?
- Gilt Account means an account opened and maintained for holding Government securities.
- Instead of money, the account is debited or credited with treasury bills or government securities.