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Frequently Asked Questions


How can a customer apply for RBI – Floating Rate Savings Bond, 2020 (Taxable)?

  • Via Kotak Net Banking:
    Log in to Net Banking > Investments tab > RBI bonds

  • Visit the branch:
    By cash (up to Rs. 20,000), cheque or demand draft

How are the bonds issued?

RBI – Floating Rate Savings Bond, 2020 (Taxable) are issued in electronic form and is credited to the investor’s Bond Ledger Account (BLA) on the date of receipt of funds. A Certificate of Holding is issued to the customer as a proof of subscription. 

  • Online mode [Through Netbanking] -  Login to netbanking > Investments > RBI bonds
  • Offline mode  [ Through Branch ]

What is the issue price?

RBI – Floating Rate Savings Bond, 2020 (Taxable) is issued at par or 100%, i.e. the bond amount will be exactly the amount paid. The bonds are issued at a minimum of Rs.1,000 and multiples thereof.

What is the maturity period?

RBI – Floating Rate Savings Bond, 2020 (Taxable)  shall be repayable on the expiration of 7 years from the issue date. Interest will not be paid after the maturity of the same.

Whether interest is Taxable?

Interest on the RBI – Floating Rate Savings Bond, 2020 (Taxable) will be taxable under the Income Tax Act, 1961, as applicable according to the relevant tax status of the holders.

Whether Tax exemption is allowed for any individual?

Yes. It is for the applicants who have obtained exemption from Income Tax under the relevant provisions of the Income Tax Act, 1961. They shall declare to that effect in the application (in Form A) and submit a true copy of the certificate obtained from Income Tax Authorities. The customer can also provide form 15 G/H

Can I make nomination?

Yes. An individual who holds the RBI – Floating Rate Savings Bond, 2020 (Taxable)  may nominate another person or persons in the event of their death who shall be entitled to the ownership and any payment due on the bond. 

Whether I can transfer the Bonds?

No. The RBI – Floating Rate Savings Bond, 2020 (Taxable) held to the credit of Bonds Ledger Account of an investor shall not be transferable.

Can a loan be taken against Floating Rate Savings Bonds 2020 (Taxable)?

No. These bonds are not eligible as collateral to avail loans from banks, Non-Banking Financial Companies (NBFCs) and Financial Institutions.

What is the date of payment of Interest for these Bonds?

Interest to the holders opting for these bonds will be paid from the date of issue up to 30th June/ 31st  December as the case may be, and thereafter half-yearly on 1st July and 1st  January for the period ending 30th June and 31st December respectively.

What will be the mode of payment of half-yearly interest for RBI Bonds to the investors?

Interest on Bonds held to the credit of the Bonds Ledger Account of an investor will be paid electronically by credit to the bank account of the holder as per the option selected by the investor/holder.

Is Premature-withdrawal allowed?

Premature encashment in respect of the RBI – Floating Rate Savings Bond, 2020 (Taxable)  shall be allowed for individual investors in the age group of 60 years and above, subject to submission of a document relating to the date of birth of the investor in support of age to the satisfaction of the issuing bank.

Is premature withdrawal permitted for joint account holders if any individual is above 60 years of age?

Yes. In case of joint holders or more than two holders, the above lock-in period will be applicable even if any holders fulfil the above eligibility conditions.

How will the penalty be calculated for premature withdrawal?

50% of interest due and payable for the last six months of the holding period will be recovered in such cases.

How is the Tax deducted at Source?

Tax will be deducted at source while making payment from time to time and credited to Government Account.

Kotak Bank offers RBI - Floating Rate Savings Bond 2020 (Taxable) [RBI - FRSB 2020 (T)].

RBI-FRSB 2020 (T) was introduced by the Government of India on July 1, 2020. The interest rate of the bond is linked to National Savings Certificate (NSC) rate as on 1st Jan and 1st July with a spread of (+) 35 bps over the respective NSC rate.

Features of RBI - FRSB 2020 (T)