PPF and SSY: If you do not invest in PPF (PPF) and Sukanya Samriddhi Yojana (SSY), then this news is for you. The Reserve Bank of India (RBI) on Friday cut the policy rate repo rate for the first time in five years. Thereafter, the government may cut the interest rate on PPFs like Smol Saveising Skeem and Sukanya Samriddhii in the next financial year. The government reviews the interest rate for small savings schemes every quarter.
The April-June quarter review will be held on March 31
The next review of the April-June quarter will be on March 31. In such a situation, the RBI’s decision may affect the interest on these savings schemes. However, the finance ministry can immediately avoid any interest rate cut as the impact of the new interest rate will be realised in the coming months. In addition, it is common for banks to raise more deposits in the fourth quarter of the financial year. “According to a government source, “”This is the best time to invest in the Saveising scheme.”
There may be less interest on a small savings plan
Experts say the ministry may reduce the interest rate on small savings schemes anytime next year. Experts say that savings schemes like PPF will still be attractive as they benefit from tax benefits and compounding. In the next financial year, the central government has estimated a total of Rs 3.4 lakh crore to be raised from the Smoll Saveing scheme as compared to the revised estimate of Rs 4.1 lakh crore this year.
7.1% on PPF and 8.2% on Sukanya Samriddhi
Apart from this, the government is also budgeting for a refund of Rs 20,000 crore under the Mahila Samman Yojana, as the scheme is being completed in March. Currently, 7.1% of non-assessers and 8.2% of non-resours are paid annually under PPF. The government may cut these rates in the coming months, so it may be beneficial for investors to invest now. Not investing in these schemes also benefits from exemption under section 80C of income tax.