The Reserve Bank of India raised the interest rate on the Government of India Floating Rate Bond 2034 by 0.81%, lifting it from 6.45% to 7.26% per annum. This upward revision applies to the half-year window running from October 30, 2026, to April 29, 2027. The increase tracks higher yields from recent 182-day Treasury bill auctions, which concluded with a 6.5140% yield on October 28. Investors will see higher cash payouts until the rate resets again in April 2027.
Key points
Investors holding FRB 2034 will earn an extra Rs 2,025 in semiannual interest per Rs 5 la…: Investors holding FRB 2034 will earn an extra Rs 2,025 in semiannual interest per Rs 5 lakh compared to the previous cycle.
The current 7.26% payout remains locked only until the next scheduled variable rate revis…: The current 7.26% payout remains locked only until the next scheduled variable rate revision in April 2027.
Yields on underlying 182-day Treasury bills rose progressively across three October aucti…: Yields on underlying 182-day Treasury bills rose progressively across three October auctions to push the bond rate upward.
Sources checked by our analysis pipeline: 1
The Reserve Bank of India has announced a 0.81% increase in the interest rate on the Government of India Floating Rate Bond 2034 (FRB 2034). As per a statement from the RBI, the FRB 2034 interest rate for the half-year period, from October 30, 2026 to April 29, 2027, will be 7.26% per annum.
This is a significant increase from the 6.45% interest rate investors received on the FRB 2034 bond.
The FRB 2034 was launched in January 2022.
Also Read: RBI hikes FRB 2034 interest rate to 7.26%: How much can you earn on Rs 5 lakh investment?
FRB 2034 bond interest rates of last four years
Source: RBI
The RBI also said that the bond rate hike is because of the rise in the Weighted Average Yield (WAY) of 182-day T-Bills.
The WAY of 182- day T-Bills is calculated from the last three auctions (with the last being from the FRB 20234 rate fixing day, i.e., October 30, 2026). The government provides an additional 0.98% fixed spread over WAY.
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