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The new rate raises FRB 2028’s current coupon to 6.45% per year. That rate covers this payment period; later resets will determine income until maturity.
Key Highlights
Holders of the Government of India Floating Rate Bond 2028 will receive more interest for the current half-year than for the preceding period. The Reserve Bank of India announced the revised rate on 1 October 2026 in its official release, No. 2026-2027/1235.
Using ₹1 lakh face value as an illustration, ₹1,00,000 × 6.45% ÷ 2 gives ₹3,225 in gross interest for the complete half-year. This amount is calculated from the announced coupon, rather than a separate payout figure published in the release.
The face-value distinction is essential for buyers entering through the secondary market. A purchase costing ₹1 lakh may include a premium or discount to face value, along with accrued interest. The coupon alone therefore does not establish the return on the amount paid. Interest income is also subject to the investor’s applicable tax rules.
FRB 2028 follows a specified formula. Its base rate is the weighted average yield of the last 3 auctions of 182-day Treasury Bills, measured from the rate-fixing day. A fixed spread of 0.64% is added to that base.
The October announcement, signed by Ajit Prasad, Deputy General Manager, Communications, applies this mechanism to the current interest period. The spread stays fixed, while movements in the benchmark feed into the reset coupon.
The official announcement dated 2 April 2026 set the preceding annual coupon at 6.17%. Both periods use the same Treasury Bill-linked formula. The table places the published rates alongside calculated income for the same illustrative holding.
The increase adds ₹140 over a complete half-year on that face value, before tax. This is a comparison of coupon payments. It does not include any gain or loss from buying or selling the bond.
Our reading is that FRB 2028’s higher coupon helps existing holders with the current payment, but the size of the increase deserves attention. The calculated ₹140 addition per ₹1 lakh face value is the extra income available for the half-year. It should not be mistaken for a large change in a household’s spending capacity.
For households also servicing debt, the coupon reset does not alter their loan contract. A comparison between investment income and borrowing costs needs the bond’s after-tax income and the loan’s actual cost. Our personal finance explainers provide a broader background; this announcement itself concerns FRB 2028’s interest payment.
April 2027 ends the current interest period; repayment of the principal is due later. FRB 2028’s repayment date is 4 October 2028 in the Ministry of Finance’s Quarterly Report on Public Debt Management for October–December 2023.
FRB 2028 holders receive a higher coupon for the current period. For a new buyer, the purchase price still needs to be weighed against the interest payable. The annual coupon describes the bond’s current payment terms, not a guaranteed return on every purchase through maturity.
For 4 October 2026–3 April 2027, FRB 2028 pays interest at an annual rate of 6.45%.
For illustration, holding ₹1 lakh face value throughout the current coupon period produces ₹3,225 in interest before tax. Tax reduces the amount retained where applicable.
No. With FRB 2028’s rate reset every 6 months, the current coupon determines only this period’s payment. Later payments depend on the rates set for those periods.
For FRB 2028, a lower Treasury Bill benchmark feeds into a lower coupon at a subsequent reset. The applicable benchmark, rather than every market rate, determines the calculation.
A sale before maturity may produce a loss if the market price is below the purchase price. Government backing does not guarantee the resale price.
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