'The government's decision to keep interest rates unchanged on small savings schemes will certainly constrain banks' ability to cut deposit rates further.'
The government on Friday raised interest rates on most post office saving schemes by up to 0.7 per cent for the April-June 2023 quarter in line with the firming of interest rates in the economy. While the interest rates for popular PPF and savings deposits have been retained at 7.1 per cent and 4 per cent, respectively, there has been an increase between 0.1 per cent and 0.7 per cent in other saving schemes, a finance ministry statement said. The highest increase was in the interest rate of the National Savings Certificate (NSC), which will now attract 7.7 per cent, up from 7 per cent, for the April 1 to June 30, 2023 period.
National Small Savings Fund schemes are losing out to stock market, bank and insurance products.
For longer tenure products, they offer higher returns compared to other instruments. But for shorter tenures, things are getting tighter for investors.
The interest rate on these schemes have remained unchanged for over a year now.
SBI has twice hiked interest rates on fixed deposits within a month, but an investor still gets better returns at the post office.
>According to the latest RBI data, PPF receipts have already experienced a decline between April 2023 and February 2024. Other schemes like the Sukanya Samriddhi Account and National Savings Certificate are also witnessing reduced inflows.
The next revision will make the rates similar to those of bank FDs.
These schemes now cease to be lucrative in spite of a raise in most of their returns. Reason: These schemes are now linked to the market.
RBI has also announced new guidelines to price loans from April 1.
NSSF collections are down by 68% over last year. Investors are preferring banks, mutual funds and insurance policies for investments over the National Small Savings Fund. In order to deploy the surplus, the NSSF plans to lend Rs 1,500 crore to India Infrastructure Finance Company Ltd at 9 per cent interest. To save the fund from collapsing, the finance ministry included 5-year Post Office Time Deposits and Senior Citizens' Saving Scheme under Section 80C for tax exemption.
Post office savings of 1, 2 and 3 year term deposits and 5-year recurring deposit currently fetch 8.4 per cent interest per annum.
The deposit facility for the women and girls will be for a period of two years with a rate of interest of 7.5 per cent, Sitharaman announced.
Centre took Rs 1,002 bn from here in 2017-18, sharply up from Rs 904 bn a year before and Rs 123.6 bn in FY14
Sebi is working with other regulators to expand the CAS framework.
Interest rate on Public Provident Fund scheme was cut to 8.1%.
Demonetisation is the biggest reason for the rise in preference for small savings.
Rationalisation in the rates offered by small savings schemes is a must.
For the purpose of our discussion, we have chosen schemes which offer tax benefits at the time of making investment under Section 80C, i.e. Public Provident Fund & National Savings Certificate.
Here is a profile of some of the popular small savings schemes.
The Centre has to bear the maximum burden of borrowing NSSF loans to the tune of Rs 1 lakh crore.
'Decide on an asset allocation you are comfortable with and stick to it for the long term.'
The panel, to be headed by Reserve Bank of India Deputy Governor Shymala Gopinath, will review the structure of the National Small Savings Fund and give recommendations on making schemes more flexible and market-linked.
NPS Vatsalya offers a disciplined investment avenue that parents can use to create intergenerational wealth by contributing even small sums.
When investing in fixed-income products, balancing considerations like safety, liquidity, and income is essential.
Overall, small savings have amassed Rs 1.17 trillion from April-September - 26 per cent more than the previous year. But in those six months, the economy lost 24 per cent in the first three months, and is slated to lose 10 per cent in the second quarter.
This Budget positions India's taxation ideology as not merely a revenue source but as a strategic catalyst for growth, inclusion and long-term confidence.
Restoring weighted tax deductions and adopting a petty patents regime can foster firm-level innovative activity critical for competitiveness, points out Nagesh Kumar.
'Grassroots-level corruption, which disrupts the last-mile work, cannot be ignored in your enthusiasm and drive to get going to complete the project.' 'Like it was in MGNREGA, in some states, it is the case with the Jal Jeevan mission.' 'The last minute levels of corruption can ruin the intent of the project itself.' 'When you see that people can game a particular well-intended and well-crafted project, you need to correct that.'
Budget 2026 sticks to fiscal discipline, shuns populist measures despite five key state elections coming up, but ends up rattling stock markets with a higher transaction tax on derivatives trading.
RBI wants to introduce these as an alternative to gold.
The staff at post offices misappropriated Rs 95.62 crore of public money between November 2002 and September 2021, the Comptroller and Auditor General has said. The money may seem small but it is what common citizen invested in post office savings, the oldest and the largest banking system in the country. The system serves the investment needs of urban and rural clients through schemes such as savings bank, recurring deposits, time deposits, national savings certificates, kisan vikas patras, public provident fund, monthly income account scheme, sukanya samriddhi accounts and senior citizens savings scheme.
Union Environment Minister Bhupender Yadav accuses the Congress of spreading misinformation regarding the new definition of the Aravallis and defends the government's commitment to protecting the mountain range while allowing limited, legal mining.
The bond, which the Reserve Bank of India started issuing on behalf of the Union government in 2003, was considered one of the safest savings instruments for retail investors.
'This election was won because of Nitish Kumar's face and his policies.'
The government on Thursday kept interest rates unchanged on small savings schemes, including NSC and PPF, for the second quarter of 2022-23 amid high inflation and rising interest rate. The interest rate on small savings schemes has not been revised since the first quarter of 2020-21. Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to have an annual interest rate of 7.1 per cent and 6.8 per cent, respectively, in the second quarter of this fiscal.
Finance Minister Nirmala Sitharaman on Thursday said the government will roll back a steep interest rate cut on small saving schemes such as PPF and NSC -- saying it was an oversight, a move being seen as an attempt by the ruling Bharatiya Janata Party to contain the fallout of a decision hitting the common man in the ongoing elections in West Bengal, Assam and three other states.
The net inflow into equity mutual funds surged 24 per cent to Rs 23,587 crore in June, reversing the declining trend of the last five months, driven by strong equity market performance across segments, data released by the Association of Mutual Funds in India (AMFI) showed on Wednesday. Also, the latest fund infusion by investors marks the 52nd consecutive month of net inflows into the segment.
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