World Thrift Day 2023: How to save money through RBI Floating Rate Savings Bonds
Safeguard against unexpected expenses: When unforeseen financial burdens arise, such as unexpected medical bills or car repairs, your savings can provide a safety net, sparing you from accumulating debt. Achieve financial objectives: Be it purchasing a home, launching a business, or retiring early, savings can expedite your journey toward accomplishing these goals. Enhance financial security: Having a financial cushion provides peace of mind and fosters better sleep quality, knowing you’re better prepared to weather life’s financial challenges.
How you save depends on how much money you want to amass for a secure future. Not all investors choose the same saving and investment options. Even the right investment option can help you to save more than mere bank deposits that yield meagre returns, despite the prolonged nature of the savings.
As an illustration, cautious investors are currently opting for Floating Rate Savings Bonds (FRSBs), 2020 (taxable) via the Retail Direct portal. These bonds represent a category of debt securities released by the RBI. They provide a safe and dependable investment avenue, featuring a floating interest rate that undergoes a reset every six months.
The interest rate on FRSBs is tied to the National Savings Certificate (NSC) rate, augmented by an additional 35 basis points. These bonds, bearing interest and non-negotiable in nature, are issued by the central government and have a seven-year maturity period from the date of issuance. Senior citizens have the option to redeem them prematurely after seven years.
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