Floating Rate Bond 2033: Interest rate raised by 12 bps to 6.87% for September 2026–March 2027

New business data points to the fact that The Reserve Bank of India (RBI) on Monday announced that the rate of interest on the Government of India Floating Rate Bond 2033 (FRB 2033) will be 6.87 percent per annum for the six-month period from September 22, 2026, to March 21, 2027.

“The rate of interest on Government of India Floating Rate Bond 2033 (FRB 2033) applicable for the half year September 22, 2026 to March 21, 2027 shall be 6.87 percent per annum,” RBI stated in a press release.

The latest rate is elevated than the 6.75 percent interest rate applicable to the bond for the previous six-month period from March 22, 2026, to September 21, 2026. The earlier rate was announced by the RBI in March this year.

The coupon on FRB 2033 is linked to the average Weighted Average Yield (WAY) of the last three auctions of 182-day Treasury Bills, along with a set spread of 1.22 percentage points.

“It may be recalled that FRB 2033 carries a coupon, which has a base rate equivalent to the average of the Weighted Average Yield (WAY) of last three auctions (from the rate fixing day, i.e., September 22, 2026) of 182 Day T-Bills, plus a set spread (1.22 percent),” RBI stated.

How is the FRB 2033 interest rate decided?

The interest rate on the Floating Rate Bond 2033 is not set for its entire tenure. Instead, it is reset every six months based on a formula linked to short-term government securities.

The base rate is calculated using the average Weighted Average Yield of the last three auctions of 182-day Treasury Bills from the rate-fixing date. A set spread of 1.22 percent is then further noted to this base rate to arrive at the coupon rate applicable to the bond.

For the latest period, the rate-fixing date is September 22, 2026. The resulting interest rate for the six months ending March 21, 2027, has been set at 6.87 percent per annum.

How can one invest in FRB 2033?

Retail market participants can buy Government of India securities through the RBI Retail Direct platform, which provides individual market participants access to government securities in the primary and secondary markets. Market participants need to open a Retail Direct account and can participate in eligible primary issuances or buy existing government securities through the NDS-OM secondary market. If a retail investor buys FRB 2033 in the secondary market above or below its face value, the investor’s effective yield can differ from 6.87 percent.