Small Savings

Rate on National Savings Certificate steeply raised by 70 bps, PPF kept unchanged

The interest rate on the Public Provident Fund has yet again been kept unchanged at 7.1%

Bonds have since pared their gains, with the budget math increasingly looking daunting as commercial interest rates soar tracking a tight monetary policy

Small savings rates for 1-year time deposit (6.6 per cent), 2-year time deposit (6.8 per cent) and 3-year time deposit (6.9 per cent) were raised by 110 bps

Rick talks about clients relating to him better because he had the courage to display his vulnerability and talk about the lessons learnt from his mistakes

National Savings Certificate, Public Provident Fund rate kept unchanged

If this happens, it will be the 10th straight quarter of status quo; govt official says Centre did not cut rates when policy rates were being cut during pandemic

Maharashtra has also seen an increase in net collections in recent years

Investors who want to avoid their long lock-in can choose from a host of other high credit quality options

While govt's market borrowings have doubled from FY16 to FY22, NSSF loans to finance fiscal deficit have grown 11x

However, do so only if your asset allocation requires you to invest more on the debt side, and you are comfortable with the long lock-in

Costlier loans from NSSF, at 7.4% interest rate, will occupy more than 10% share in govt's outstanding public debt soon, all to give the small saver a higher interest rate than the market

A record, this is 25% more than last year, and 130% more than the average of the past five years

Collections by small savings schemes crossed Rs 1 trillion in April-September for the first time

Indicative of a possibility that people redeemed their savings for consumption after a likely loss in incomes

As cash is priority, you can delay payment. But there will be loss in interest income

Bond yields will also be under pressure due to Rs 2.7 trillion of switches in FY21, which increases duration risk

A cheer for depositors, the move is contrary to what RBI and banks had advised

In April-June 2019 (Q1FY20), bank deposits grew by Rs 1.14 trillion, according to Reserve Bank of India data

Public Provident Fund (and National Savings Certificate will fetch annual interest rate of 7.9 per cent.