RBI Floating Rate Savings Bond
FRSB 2020 (Taxable)
A Government of India bond. The rate is not fixed: it resets every six months at the NSC rate plus 0.35%.
Key facts
- Interest rate
- 8.05% a year until 31 Dec 2026, then it resets
- Interest paid
- Every 1 Jan and 1 Jul (paid out, not compounded)
- Tenor
- 7 years
- Who can invest
- Resident individuals and HUFs. No upper limit. NRIs cannot invest
- Tax
- Interest is taxable at your slab rate
- Early exit
- Only for specified senior citizens. Cannot be traded or used as loan collateral
How to start
- Create an account on RBI Retail Direct (or apply at a designated bank branch).
- Choose “Floating Rate Savings Bond 2020” and invest.
Watch out: The rate can fall at the next reset, and your money is locked in for seven years.
VPF · Voluntary Provident Fund
Extra money into your EPF
If you are an EPF member, you can put extra salary into your EPF account on top of the mandatory contribution. It earns the same interest as EPF.
Key facts
- Interest rate
- EPF rate for FY 2025-26 was 8.25%. It is declared every year, so it is not fixed for ten years
- How to start
- Through your employer: ask HR or payroll to raise your PF deduction
- How much
- Up to your full basic salary plus DA. Your employer does not match the extra amount
- Tax on interest
- Tax-free only while your own yearly EPF + VPF contribution stays within ₹2.5 lakh (₹5 lakh if your employer does not contribute). Interest on the excess is taxable
- Tax at withdrawal
- Maturity can be tax-free under eligible conditions, such as five years of continuous service. Early withdrawal can be taxable
How to start
- Ask your HR or payroll team for the VPF form and the monthly amount.
- Check your balance and passbook on the EPFO Member portal.
Watch out: The yearly rate is set by the government and can change. Confirm the tax limits with your employer or a CA before raising your contribution.
10-Year Government of India Bonds
G-Secs on RBI Retail Direct
You lend to the Government of India for ten years and receive interest twice a year. Your actual return depends on the price you pay and the yield available on the day.
Key facts
- Where to buy
- RBI Retail Direct: new issues (primary auctions) or the secondary market
- Your return
- Depends on the purchase price and the yield that day, not on the coupon alone
- Every bond differs
- Two 10-year bonds can give different returns. Check the price and yield shown before you place an order
- Tax
- Interest is taxable at your slab rate
- Selling early
- The market price can be higher or lower than what you paid
How to start
- Open an RBI Retail Direct account.
- Compare the available 10-year bonds, check the price and yield, then place your order.
Watch out: Sell before maturity and you may get less than you paid. Treat it as a ten-year holding.
Before you invest
- Match the tenor to your goal. Do not lock money you may need soon.
- Check how the interest is taxed before you compare rates.
- Rates change. Confirm the current rate on the official link, not on a reel.
- Start small, and read the FAQs on the official page first.
finance.chai shares general education, not investment advice. Rates and rules change, so verify everything on the official links before you act. Rates and rules last checked 11 Nov 2026.