Interest rates for Small Savings Schemes in India – April 2020
Interest rates on Small Savings Schemes are subject to change in every quarter. Recently, the Reserve Bank of India reduced the REPO rate for banks. Following this, the interest rates for Small Savings Schemes have been drastically reduced.
The Proposed change / new interest rate is for the period between April to June 2020. The Interest rates for the Small Savings Scheme have remained unchanged over the past one year and now the rates have been significantly come down.
For the Senior Citizen Savings Scheme (SCSS), the interest rate was earlier said to 8.60 Percent, which is come down to 7.40 Percent now. The interest for National Savings Certificate (NSC) has been reduced to 6.80 Percent, from 7.90 Percent.
The 5 years Monthly Income Scheme (MIS) fell to 6.6 Percent Interest rate. Last time, it was said to be 7.6 Percent. Interest rates for the Sukanya Samriddhi Account have been reduced to 7.60 Percent from 8.40 Percent. The KVP (Kisan Vikas Patra) Scheme which comes with 6.90 Percent. Earlier, it was 7.60 Percent for the Period of January to March 2020.
The One year Term Deposit rate has fallen 5.50 Percent from 6.90 Percent. This applies to the Two year and Three year Term Deposit also. The interest rate for the 5 year Term Deposit comes with 6.70 Percent.
Public Provident Fund (PPF) which is a Long term Tax Savings Plan under the Small Savings Scheme, has yield with 7.10 Percent Interest rate. The Interest rate for the Savings account has remained unchanged with 4 Percent.
However, the exact rates are low for Savings account in Banks. Generally, when the interest rates are declining, then the Bond yields increases. Interest rates for the Small Savings Scheme in Post Office and Banks may be reduced further in the upcoming policies. Therefore, it may not benefited to the Retail Small Savings Citizens.
One can opt for the Liquid and Debt Mutual Funds, who are ready with Low risk rather than putting the money in Small Savings. For the Long term investors, Equity oriented funds are good at now. An investment opportunity which is available in the pessimism times, will not available in the Bull Market.
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