Key Highlights :
The interest rate on RBI floating rate bonds is linked to interest rate on National Savings Certificate (NSC). Any change in the NSC interest rate will also be reflected in the interest rate offered on RBI floating rate bonds. Recently, the government has hiked the interest rate on NSC for April to June 2023 quarter. The next review of RBI savings bonds is due on June 30, 2023.
The interest rate on NSC is decided by the Reserve Bank of India. The interest rate offered on NSC is linked to the yield on government securities of the corresponding maturity. The NSC yield is determined by the market conditions and the interest rates offered on different government securities. The RBI has announced that the interest rate on NSC for the April to June 2023 quarter will be hiked by 0.25%. This will result in an interest rate of 7.25% on NSC for the quarter.
The RBI has also announced that the interest rate on RBI floating rate bonds will be linked to the interest rate on NSC from June 30, 2023. This means that the interest rate on RBI floating rate bonds will be based on the 7.25% interest rate on NSC from June 30, 2023. This will ensure that the interest rate offered on RBI floating rate bonds remains stable even if the interest rate on government securities changes.
The interest rate offered on RBI floating rate bonds is an important tool for investors. It allows investors to lock in a fixed interest rate for a period of six months. This is useful for investors who want to avoid fluctuations in the market. The interest rate offered on RBI floating rate bonds is also linked to the interest rate on NSC. This means that the interest rate on RBI floating rate bonds will be based on the interest rate offered on NSC. This will ensure that the interest rate offered on RBI floating rate bonds remains stable even if the interest rate on government securities changes.