Floating-rate bond 2028: RBI sets 6.45% interest rate for October 2026-April 2027; what investors should know

The RBI has fixed the interest rate on Government of India Floating Rate Bond 2028 at 6.45% for 4 October 2026 to 3 April 2027. Here’s how the rate is set, what investors can earn and what to know before investing.

The Reserve Bank of India (RBI) has fixed the interest rate on the Government of India Floating Rate Bond 2028 (FRB 2028) at 6.45% per annum for the six-month period from 4 October 2026 to 3 April 2027.

The rate is higher than the 6.17% coupon applicable to the bond during the previous six-month period, which ended on 3 October 2026.

However, investors should not read the 6.45% rate as a return that will remain unchanged until the bond matures. As the name suggests, the bond has a floating coupon that is reset every six months.

How the floating rate is calculated

The coupon on FRB 2028 is linked to short-term government borrowing rates. According to the RBI, its base rate is the average Weighted Average Yield (WAY) of the last three auctions of 182-day Treasury Bills, calculated from the rate-fixing day. A fixed spread of 0.64 percentage point is added to this base rate.

For the current half-year, this mechanism has resulted in a coupon of 6.45%.

This means the interest rate can change at the next reset. If yields on 182-day Treasury Bills rise, the coupon on the floating-rate bond can increase. If those yields fall, the coupon can decline.

For an investor, this is an important difference from a fixed-rate bond or fixed-rate deposit, where the contracted rate generally remains unchanged for the agreed tenure.