The Reserve Bank of India (RBI) has announced an expansion of its Retail Direct portal, allowing retail investors to purchase Floating Rate Savings Bonds 2020 (Taxable).
This move comes as part of the RBI’s ongoing efforts to streamline and enhance access to government securities for individual investors.
The RBI-Retail Direct Scheme, inaugurated by Prime Minister Narendra Modi on November 12, 2021, has proven to be a game-changer for retail investors.
This scheme simplifies the investment process and makes it easier for individuals to invest in government securities both in the primary and secondary markets.
Understanding the RBI-Retail Direct Scheme
Under the RBI-Retail Direct Scheme, individual investors can swiftly establish a Retail Direct Gilt Account with the RBI using an online portal.
With this account, investors gain the ability to invest in government securities, including the recently added Floating Rate Savings Bonds 2020 (Taxable), often referred to as FRSB 2020 (T).
The FRSB Bonds
Floating Rate Savings Bonds, or FRSB bonds, are issued by the central government and come with a unique feature—they cannot be traded or transacted.
Investors who acquire these bonds can anticipate receiving returns after a seven-year holding period from the date of issuance.
Previously, the Retail Direct portal allowed retail investors to invest in central government securities, treasury bills, state government securities, and sovereign gold bonds.
The addition of FRSB bonds further broadens the investment options available to retail investors, facilitating a more diverse and accessible investment landscape.
This development underscores the commitment of the Reserve Bank of India to create an investor-friendly environment, making it easier for individuals to participate in the Indian government securities market.
