2021 is to commence with somewhat positive news for these who place their savings in fixed-revenue investments. The government has decided to preserve the interest price on tiny savings schemes unchanged for the quarter January to March 2021. The interest price on PPF remains at 7.1 per cent per annum whilst for the Senior Citizen Savings Scheme, the interest price is 7.4 per cent per annum. The 1-year time deposit, the price of interest stands at 5.5 per cent.
Although the RBI has reduce the repo price by 115 basis points in 2020, the later half of the year did not see any price reduce, therefore signalling a pause in the fall in interest prices.
The interest prices on post workplace savings schemes are revised by the government each and every quarter primarily based on the yield on government bonds. Earlier, for the quarter of July to September and October to December 2020, the government had kept the interest prices on tiny saving schemes unchanged. It was only in the April to June 2020 quarter which saw a revision in the prices.
As there is no alter in the price of interest on post workplace tiny savings investments such as National Savings Certificates (NSC), KVP, Time-deposits, Public Provident Fund (PPF), Senior Citizens Savings Scheme (SCSS), Sukanya Samriddhi Yojana (SSY) and so forth., the PO schemes will continue to score more than bank deposits as at present, the latter is supplying interest of about 6 per cent across most tenures.
If at all there is a revision in interest prices, in any quarter of the economic years, it does not effect the current investors in some of the tiny saving schemes. That is for the reason that the prices stay continuous in some of the post workplace schemes for the whole tenure.
For the investor who invests in NSC, KVP, Time deposits, Senior Citizens Savings Scheme (SCSS), the price of interest remains fixed till maturity. However, investors of PPF and Sukanya Samriddhi Yojana (SSY) see a revision in the price as and when the government revises the price at every single quarter of any economic year.
Considering the present price of interest on bank FD, the post workplace schemes may well nonetheless seem eye-catching. Before investing, make certain about the tax liability of the interest that you will earn on PO schemes as some of them may well have a taxable interest. Also, as most of them have a extended duration, make certain you have liquid funds at your disposal just before parking for the extended term. Invest in them by linking to your extended term requirements and maintaining asset allocation across equity and debt into consideration. Importantly, the post workplace schemes carry a sovereign assure on the whole quantity invested and are, for that reason, regarded hugely protected.