What happened
The Reserve Bank of India (RBI) has announced that the Government of India Floating Rate Bond 2034 (FRB 2034) will pay interest of 7.26% a year for the half year from 30 October 2026 to 29 April 2027. The announcement came in a press release dated 29 October 2026, and CNBC-TV18 also reported the rate.
A floating rate bond is a government security whose interest rate is reset periodically instead of staying fixed for its whole life. FRB 2034 is reset every half year.
How the rate is worked out
The coupon, which is the interest rate the bond pays, has two parts. The base is the average of the Weighted Average Yield (WAY) of the last three auctions of 182-day Treasury Bills, counted from the rate fixing day, 30 October 2026. A Treasury Bill is a short-term government borrowing instrument, and the WAY is the average yield at which bids were accepted in an auction.
To this base, a fixed spread of 0.98% is added. The RBI release does not state the base rate separately, so the figures here cover only the final 7.26%.
What it means for you
If you hold FRB 2034, the interest for the current half year will accrue at 7.26% a year. Because the rate follows T-bill yields, it can be higher or lower at the next reset, depending on those auctions.
If you want to compare this rate with bank deposits, you can use the FD Calculator to see what a deposit would earn over a similar period.
Background
FRB 2034 is a Government of India bond that matures in 2034. Its design links the interest to short-term market yields, so the payout moves with them at each half-yearly reset. The RBI release was issued under Press Release 2026-2027/1405.
