Floating Rate Bonds Explained | business – Times of India Videos

Floating rate bonds are issued by financial institutions, corporations and governments to borrow money from the public. Now, unlike regular bonds, which pay a fixed interest rate, floating rate bonds have a variable interest rate that is tied to a predetermined benchmark rate and reset at regular intervals. It can be anything from benchmark repo rate, reverse repo, average T-bill rate or some small savings scheme interest rate. Similarly in international markets, possible benchmarks include the US Treasury Note Rate, Fed Funds Rate, LIBOR, etc.