Small savings rates – what REALly matters?

Small savings rates table new 2016

So, small savings rates across the spectrum have been cut including that of the ever popular PPF, Senior Citizens Savings Scheme and the Sukanya Samriddhi Yojana.

In fact, the rates will now be reset every quarter.

Here is the new rate structure applicable on Small Savings Instruments from April 1, 2016:

Small savings rates table new 2016

People are shocked and dismayed at this drastic cut.

Unfortunately, if you too are, then you are missing the real picture. To see this real picture, you would have to add another column to the above table, that of inflation rate

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Is a fixed deposit your only option?

Fixed Deposit

“So you have spare money in your bank account“, I repeated to confirm what Ajay just told me. “What are you planning to do with it?“, I further asked. “Well, It’s about Rs. 5 lacs and I can put them towards my emergency funds. I guess I will create a Fixed Deposit.” Ajay seemed to have made up his … Read more