'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.
SBI has twice hiked interest rates on fixed deposits within a month, but an investor still gets better returns at the post office.
The next revision will make the rates similar to those of bank FDs.
The interest rate on these schemes have remained unchanged for over a year now.
>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.
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.
'Whether you will bring this down and cause hurt to senior citizens, who are probably living on that little interest rate that they earn out of it... But equally, if I just look at the kitty of the National Small Savings Fund, it is from that same kitty that I'm borrowing.'
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.
The Indian government has maintained the interest rates on small savings schemes, including PPF and NSC, for the eighth consecutive quarter, starting April 1, 2026.
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
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.
Sebi is working with other regulators to expand the CAS framework.
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.
Jewellers in Lucknow protest Prime Minister Modi's appeal to defer gold purchases for a year amid the West Asia crisis, fearing significant business losses and economic hardship for those involved in the trade.
Deferred payment plans may come with a cost, which may not be immediately visible.
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.
'Every year we import approximately $70 billion worth of gold -- closer to $72 billion in 2025-2026, an all-time record.' 'There is no parallel for this anywhere in the world. And this love for gold will not disappear overnight.'
When investing in fixed-income products, balancing considerations like safety, liquidity, and income is essential.
What lessons opposition parties need to learn post defeat of Mamata Banerjee in West Bengal elections? The election saw spectacular victor of BJP which rose from 3 seats in 2016 to 206 seats in 2026 assembly elections.
'If the Opposition associates itself too much with the minorities, then it becomes easy for the BJP to get Hindu consolidation votes.'
A BJP government in Bengal inherits more problems than it might care to admit at its moment of triumph, points out Ramesh Menon
NPS Vatsalya offers a disciplined investment avenue that parents can use to create intergenerational wealth by contributing even small sums.
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.
Israel has for more than two decades and several US presidencies worked to draw the United States into a full-scale war with Iran. Having finally achieved that, the last thing it wants is Trump declaring victory and going home, as he is prone to do. Ali Larijani was the figure most capable of handing Trump a negotiated exit with something to show for it. Without Larijani, the road to an exit gets considerably narrower. Prem Panicker continues his must read daily blog on the Gulf War.
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.
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