Govt Bond Rate Jumps to 7.26%: What You Earn Now?
RBI has raised the interest rate on Floating Rate Bond 2034 from 6.45% to 7.26% per year. If you hold this government bond, your next coupon payment will be higher. This is effective from October 30, 2026 to April 29, 2027.
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₹5 lakh in FRB 2034 now earns ₹18,150 per half-year — more than most Indians' monthly grocery bill.
Your Government Bond investment just got a higher payout this cycle
Key Takeaways
Check your demat account — if you hold FRB 2034 units, your next coupon arriving after October 30, 2026 will automatically reflect the higher 7.26% rate; no action is required.
Compare the post-tax yield of FRB 2034 against your bank's best FD rate — at 7.26%, the pre-tax payout beats many 1-3 year FDs currently on offer.
If you are in the 30% tax slab, calculate your effective post-tax yield (roughly 5.07%) before investing; FRB 2034 suits those in lower slabs or looking for sovereign safety over tax efficiency.
RBI has raised the interest rate on Floating Rate Bond 2034 from 6.45% to 7.26% per year. If you hold this government bond, your next coupon payment will be higher. This is effective from October 30, 2026 to April 29, 2027.
Here's what happened: RBI has reset the FRB 2034 interest rate to 7.26% per annum, up sharply from the previous 6.45%, effective October 30, 2026 to April 29, 2027.. A ₹5 lakh investment in this bond will now earn ₹18,150 every six months as coupon income, compared to ₹16,125 at the old rate.. The Floating Rate Bond 2034 is a sovereign Government of India instrument held in demat form and tradable on stock exchanges, unlike a fixed deposit..
What you should do: Check your demat account — if you hold FRB 2034 units, your next coupon arriving after October 30, 2026 will automatically reflect the higher 7.26% rate; no action is required.. Compare the post-tax yield of FRB 2034 against your bank's best FD rate — at 7.26%, the pre-tax payout beats many 1-3 year FDs currently on offer.. If you are in the 30% tax slab, calculate your effective post-tax yield (roughly 5.07%) before investing; FRB 2034 suits those in lower slabs or looking for sovereign safety over tax efficiency..
FRB 2034's rate is benchmarked to the NSC rate — when NSC rates rise at post offices, this bond's next reset will likely rise too. Watch post-office scheme rate revisions as an early signal.
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- [1]“RBI hikes FRB 2034 interest rate to 7.26%: How much can you earn on Rs 5 lakh investment?” Wealth-Economic Times · 30 Oct 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.
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