In February this year, not even 3 weeks ago, the Finance Ministry announced some radical measures around the rates that various Small Savings Schemes currently offer. The products that are colloquially referred to as Small Savings Schemes include: Post Office Savings Bank accounts Public Provident Fund Post Office Time Deposits (1-yr, 2-yr, 3-yr and 5-yr) Post Office RDs Kisan Vikas Patra National Savings Certificate among others. Currently, the rates for these products stand at: How Do the Interest Rates for these Schemes Get Determined? The Ministry segregates these schemes, on the usage of the funds that are raised through them. Based on the perceived ‘nobility’ of the cause, the schemes offer rates above the benchmark Government Security of comparable maturities. So for example, the Sukanya Samriddhi Yojana and the Senior Citizens Savings scheme offer 9.2% and 9.3% respectively; the highest among the Small Savings schemes. They enjoy a spread of 75 bps and 100 bps over the rate of G-securities of comparable maturities.… (Read On…)
[via Capital Mind]
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