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RBI Sets Floating Rate Bond 2028 Coupon at 6.45%
The Reserve Bank of India has set the bond’s interest rate at 6.45% for the next six months.
That is higher than the 6.17% rate for the previous six months.
The rate does not stay fixed for the whole life of the bond.
It is reset every six months using recent Treasury Bill auction yields and an added spread.
If those yields rise, the bond’s interest rate may rise too; if they fall, it may fall.
At 6.45%, ₹1 lakh would earn ₹6,450 in a year only if the rate stayed the same for that whole year.
The bond matures in 2028.
The price an investor pays can also affect their total return.
The Reserve Bank of India set the Government of India Floating Rate Bond 2028 coupon at 6.45% per annum for 4 October 2026 to 3 April 2027.
The new rate is up from 6.17% for the previous six-month period, which ended on 3 October 2026.
The coupon resets every six months, using the average weighted average yield of the latest three 182-day Treasury Bill auctions plus a fixed 0.64-percentage-point spread.
At 6.45%, ₹1 lakh would earn ₹6,450 over a full year if that rate stayed unchanged; future coupon rates may change.
Investors’ overall returns can also depend on the purchase price, especially when buying the bond in the secondary market.
- Who
- The Reserve Bank of India set the coupon for the Government of India Floating Rate Bond 2028.
- What
- The coupon is 6.45% per annum for the six-month period from 4 October 2026 to 3 April 2027.
- Where
- India.
- When
- The new coupon period runs from 4 October 2026 to 3 April 2027.
- Why
- The coupon is reset every six months using the average weighted average yield of the latest three 182-day Treasury Bill auctions, plus a fixed 0.64-percentage-point spread.
Potential advantages
Potential drawbacks
Changing interest rates
Potential advantages
The floating coupon can adjust upward at future resets if yields on 182-day Treasury Bills rise.
Potential drawbacks
Future coupons are uncertain and may decline if those Treasury Bill yields fall.
Income expectations
Potential advantages
The bond offers government-security exposure without locking investors into one coupon for the remaining tenure.
Potential drawbacks
The current 6.45% rate should not be treated as guaranteed income through maturity, and overall return can depend on the purchase price.
Key facts
- Bond
- Government of India Floating Rate Bond 2028 (FRB 2028)
- Coupon rate
- 6.45% per annum
- Applicable period
- 4 October 2026 to 3 April 2027
- Previous coupon
- 6.17%, for the period ending 3 October 2026
- Reset frequency
- Every six months
- Rate formula
- Average weighted average yield of the latest three 182-day Treasury Bill auctions, plus a fixed 0.64-percentage-point spread
- Illustrative interest
- ₹6,450 over a full year on ₹1 lakh if the 6.45% rate remained unchanged
Sources
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