PPF, Kisan Vikas Patra rates cut: As interest rate fall further, it's time to consider bolder investment options
The government today cut interest rate on small savings schemes such as PPF (public provident fund), Kisan Vikas Patra and Sukanya Samridhhi Savings Scheme by 10 bps. The new rates are applicable for April-June quarter. This will have a marginal impact on investors who depend on interests income from small saving schemes. For instance, if you had invested Rs 1 lakh, you would have earlier got an interest of Rs 8,000 per annum when the rate was at 8 percent. In the reduced interest rate scenario, you now stand to get Rs 7,900 per annum at 7.9 percent. The move is in keeping with the government's decision to reduce small savings rates to align with the rates in the economy. Currently, one-year bank fixed deposits rates are hovering in the range of 6.50-7.00 percent. In general, interest rates are on a downward curve, with bank deposit rates too falling in last few months owing to liquidity gush post the demonetisation move. Here is what financial planners have to advise in a