PPF interest rate reduced from 8.7% to 8.1% effective April

POSTED BY manish ON March 18, 2016 COMMENTS (165)

The government has cut the interest rate on Public Provident Fund from 8.7%to 8.1% effective April.

This was part of the interest rate cuts in the small saving schemes and apart from PPF, other very famous instruments like Kisan Vikas Patra, Senior Citizen Scheme & NSC interest rates have also come down by a good margin.

These new rates will be applicable from Apr 1st. Please note that this is one of the biggest rate cuts in the small saving schemes in a long time.

Here is a summary of all the rate cuts

  • Kisan Vikas Patra interest rates down from 8.7% to 7.8%
  • NSC interest rates down from 8.5% to 8.1%
  • Senior Citizen Saving Scheme interest down from 9.3% to 8.6%
  • 5 yr NSC (National Saving Scheme) interest down from 8.5% to 8.1%
  • Sukanya Samriddhi Yojana interest down from 9.2% to 8.6%
  • 1 yr time post office deposits has been cut from 8.4% to 7.1%
  • 2 yr time post office deposits has been cut from 8.4% to 7.2%
  • 3 yr time post office deposits has been cut from 8.4% to 7.4%
  • 5 yr time post office deposits has been cut from 8.5% to 7.9%
  • Postal saving deposits remain unchanged at 4%

Interest rates aligned with market rates

On Feb 16, 2016 (before the budget) itself the govt had announced that they are working towards bring the small saving interest rates closed to the market rates, but that time no changes were done in these schemes.

The government had on February 16 announced moving small saving interest rates closer to market rates. On that day, rates on short-term post office deposits was cut by 0.25 per cent but long-term instruments such as MIS, PPF, senior citizen and girl child schemes were left untouched.

Now the interest on these schemes is closer to the interest rates given by the banks.

I will leave the decision to conclude if this was a good or bad move by govt on you, however the common man is not very happy with this. Messages against this move are are all over the twitter.

ppf interest rate reduction reactions

What is your reaction to this?

Majority of investors in India invest in Public Providend Fund (PPF) scheme and it’s very close to their heart. However this move will make many people think if PPF is the best thing they can do with their money or not (learn how PPF interest rate is calculated).

Will they move to equity markets because of this move? Will it make them interested in other kind of financial products?

What do you think? Do you think of this big interest rate cut in PPF and other schemes? Please share your views in comments section.

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165 replies on this article “PPF interest rate reduced from 8.7% to 8.1% effective April”

  1. Rajat Monga says:

    I am prospective investor and was looking for some radical investment options. Can you suggest some? Recently heard about P2P lending and was thinking of investing some amount.

    1. P2p is a lending product, not investing product

  2. Tarun says:

    Hi

    Manishji pls write an article about promises made by leaders before election .

    As once I saw speech at amrtisar of Mr jaitly who were saying that income tax slab to be raised up to 5 lakh . means no tax up to 5lakh income .where that thought have gone …

    Government always forget the promises made before election .but active media should always remind and make question about promises ..
    Hope suggestion will be appreciated ….

    1. Thanks for your comment Tarun

  3. KATHIRESANC says:

    The reduction in interest rate is one of the worst decision by any government, showing the inability of the present PM Narendra Modi and Mr. Arun Jaitley the Finance minister, whom the people rejected through vote. If they do not know how to formulate a budget, can approach person like me who can give full support in formulating a good budget, without affecting the below average people. Govt should take immediate steps to bring back the original interest rates for all schemes.

    1. Thanks for your comment KATHIRESANC

  4. Jeevan says:

    It’s very bad and affect every common man in our country as Govt. is unable to get taxes from Reliance, Birla, Jindal etc except Tata.
    Govt. failed to get the black money back as well.

    1. Thanks for your comment Jeevan

  5. GOWRISHANKAR says:

    Firstly Mr Jitley meddles with the EPF and says that all withdrawals will be taxable. Later he had to eat his words in the Parliament and now, he withdraws such a move in the budget. Later, to compensate for loss of revenue, he now has reduced the Small Savings Rate for the Aam Aadmi of the country. The Finance Minister can afford to write off huge loans to Big Industrialists without batting an eyelid and shore up the Share Capital of PSU Banks with Tax Payers money. Wherefrom do you think he can make up his Balancing Act. Tax and Kill the Aam Aadmi. I have known a Hardware shop owner paying Rs .3000 as income tax and he was proud to be a PAN CARD holder. He has around Rs. 20.00 lacs of stocks of hardware in his godown. Whereas a ordinary bank employee in the clerical cadre pays a Income tax of anything around Rs. 50,000
    per annum. This is our India. Mera Bharat Mahaan. Finance Minister Jai Ho. Now, for a change, can all the intelligent people from the Aam Aadmi cadre think of ways to avoid paying tax like those hardware dealers? We should really do something. Any ideas please to avoid this TDS business by employers.?

    1. Thanks for your comment GOWRISHANKAR

  6. shyam says:

    Manish, I have on PPF account (opened in 2012 and interest rate was 8.7%). now as per new notification interest rate will be 8.1% (effective from April 1, 2016 ).

    so here is my doubt.. what would be applicable interest on my old deposits after 1st april ? and if i am doing any new deposit (account opened in FY 12) after 1st april what would be applicable interest rate on this new deposit ?

    I read your replies for one of the similar question , but still I didn’t understand bcz your reply was too short.

    please help me to understand it, please explain in detail.

    Regards,
    Shyam

    1. Interest is calculated on monthly basis, so all the interest calculation each month is done and amount is added to your account. You cant lock in a interest rate !

  7. Abhishek says:

    Good for economy in the long run but bad for investors!!!

    1. CommanIndian says:

      are you kidding me good for economy these politicians want money so they can fill up their own pockets or can run election campaigns if u trust and think its good for country then donate everything u have including ur house to this govt. they will take it gladly and after that will ask u who r u i and lot others now think we wasted our vote voting for this party who sucks middle class really bad garib to garib hi rahega uski to maar nahi sakte middle class ki maar lo unko bhi poverty line ke nichar lekar aao BJP is all abt anti middle class & pro taxes rich jo hein unko aur loan do defaulter banao aur bhagao is desh se what a joke

  8. anand gupta says:

    sir this is not good declaration to reduce PPF rate of interest and also other tupe of savings…….if it happen than middle class person can not invest as because they did not get return from their….please do something for middle class people

    1. You tell me what should I do ?

  9. Kailash says:

    Dear Sir, if I open new postal RD before 31mar2016 i.e 24march16. current interest rate is 8.40% for RD. from apr16 reduced to 7.40% what interest will apply 8.40 for entire 5 year? if we extent 5 year block what interest rate same % are future rate on next 5 year? also I am aware quarterly compounded in RD after three months which interest rate is calculated? 8.40 or 7.40 kindly explain.

    1. CommonIndian says:

      after april 16 when ever u contribute money to RD it will be accroding to revised rate i.e 7.40% but all contributions made towards RD will be according to 8.40% it will be new reduced rate until its revised again sucks middle class ki maarne lage hein BJP = ANTI MIDDLE CLASS i and india wasted our votes dont u think so

      1. Kailash says:

        Thank you. god only saves middle class.

    2. You cant lock in a fixed interest rate for entire tenure . Its calculated on monthly basis

      1. Kailash says:

        Thank you sir.

  10. dkyamdagni says:

    reducing interest rate on small saving scheme is disappointing for middle class n retired persons. govt is pro corporates n business class( VERY RICH) N very poor people.neglecting middle class people.bad luck

    1. Thanks for your comment dkyamdagni

  11. Jaykumar says:

    Earlier discussion of EPF withdrawal was rolled back not because middle class protested it happened because journalist working for print media & MSM too where impacted they too keep switching there job and probably earning are in several lakh & renowned journalist CTC may run in crors. So they shouted now see no protest by media on interest cut on small savings so far not came across any article on this cut by so called journalist in finance expert as they are least bothered and concerned about small savings.

    1. Thanks for your comment Jaykumar

  12. nikunjrateria says:

    Not a good move

  13. Tej says:

    You should forward all. these comments of comman man/middle class / senior citizen and. serving people to Modiji and Arun jaitly to know the pains of these people.

    1. Thanks for your comment Tej

  14. Pradeep says:

    I am shocked at so many people here whom I assume as literate commenting that this govt is against middle class for this rate cuts.
    What do these people want? 12% inflation overall with 10% interest paid on their deposits? And a congress govt to loot the country while dividing and ruling the people?

    Its fair to say most of the people here doesn’t understand economics.
    This country badly needs growth and it can happen only if investments start and it can only start if banks lend at lower rates. Growth and investment creates jobs which will put many youngsters on work and money on their hands.
    Obviously they could spend some and save some of it. Only if people spend money, does other people can go to work.
    If you keep money in the bank, it will lose value and who knows you may not be around to spend whatever is left.
    Having said that, I think Modi govt is wrong in not reducing fuel prices which is real looting and EPF tax which they rolled back

    Congress govt killed growth and made the people beggars. They are now not allowing BJP to pass any reforms.
    Our people will get another 10 years of that Rahul govt from 2019 and we will be sure to see unemployment of 20% and riots for food. IT WILL HAPPEN if people continue to be illiterates

    1. santosh says:

      I second Pradeep !

    2. Atanu says:

      Why this development always has to happen by killing the middle class? Even the senior citizens are not spared. Doesn’t matter which party is in power. Why no positive attempt is being made towards bringing the black money thrashed in foreign lands. Why the super rich always escape the barrel. Why India is becoming a safe heaven for scam-stars?
      Anyway this is not the right forum for all these. Literacy shouldn’t make you blindfolded my friend.

      1. Abcs says:

        Dear Friends,

        new to JI….Stones will be thrown at the trees with full of fruits which is the earning class.
        When was the last time in the history of our country’s freedom did a tax payer got any freebies.

        Anonymous

        1. Thanks for your comment Abcs

      2. Pradeep says:

        I am sure all of us got so much frustration, I can add some more. Why politicians get away with all scams, why economically well off Backward classes and ST/SC enjoy reservation benefits generation after generation rendering it meaningless, why our autorickshaws still charge plenty despite drop in fuel prices, etc.
        Do you know the Superrich pay 35% taxes on their income? Do you want to milk more from them? This isnt a communist state to snatch money from rich and give it to poor. I would say middle class only pay 10% tax overall after deductions and lesser tax rates on lower slabs. So please dont blame superrich, they pay back so much. They run business too creating jobs. If you drive them out by plundering from them many of our children might be jobless tomorrow.
        Tomorrow if you become superrich, you would not want to pay that much tax even though today you might say you would,

        Then literacy is so important you know my friend. Let me explain interest rates.
        Interest rates will be high only when inflation is high. So it is an abnormal situation if interest rates are high in a country because inflation is high and what you earn you spend most of it due to high cost even for basic services and items.
        But if the inflation is low, you will be able to save more and when you save more you may put more money in the bank account. So even if interest rates are low, you will still have more money in the bank. Go search for “Real Returns” in the internet and you will learn more.
        Mind you low inflation means prices are rising slowly and not that it is coming down.
        Developed countries have 1-2% inflation and thats somewhere ideal.

        Finally, a lot of us disapprove rate cuts by govt, but we don’t even do proper tax planning which would leave more money on our hands. So we must be smart with our money and these instruments are not forced upon us by anybody. I know plenty of people have invested in LIC policies for 5% returns and hardly any complaints.
        PPF still gives you 8.1%, not bad when inflation is 5% today. When inflation was 8% 2 years back we were only getting 8.7% at that time.
        When inflation goes up, interest rates will go up and PPF will give you more. But let me tell you no one wants high inflation

        1. Vinod says:

          I agree to Pradeep’s comments.

        2. Thanks for your comment Pradeep

      3. Hory says:

        Some of the schemes of the government are appreciable. Like the Jan Dhan, the accident and the pension. I think some good work is happening. When Modi govt had asked people to voluntarily give up LPG subsidy, many raised eyebrows. However today around 75 lakhs have surrendered their subsidies. It is a welcome move.

        Please understand that PPF is still tax free. If you compare any MF debt product with PPF, taking into consideration the tax component, PPF still scores higher on many accounts.

      4. Thanks for your comment Atanu

    3. CommonIndian says:

      I assure u after BJP done looting middle class for next few years economy wont be anywhere indian youth still not going to have jobs u r day dreamer or bjp supporter anyways i voted for BJP biggest mistake of my life but u know we learn from our mistakes i guess BJP is Anti Indian middle class

    4. Thanks for your comment Pradeep

  15. Shailender says:

    Are these rates applicable for older deposits also? Suppose, I open a SCSS (currently at 9.3%) on or before 31st March, 2016. Will reduced rate of 8.6% (effective from April 1, 2016 and to be reviewed quarterly) be applicable on my savings as well. Regards

    1. No , there interest are calculated as per the current rates !

      1. Shailender says:

        Thank you very much !

      2. pkpadhy23 says:

        Sir does it mean if I open a new account before 31st march 2016, I will get at rate of interest of 9.3% for next five years i.e maturity of the deposit

  16. Tarsem says:

    Dear Modi ji/ arun jailty ji if you are thinking…you have come in the power for life time… you are wrong if you are thinking no one can beat you in elections you are wrong…this has proved in Delhi elections….how long time u can encash modi’s face and his false promises and only verbal commitment….. day will come u will regret on your decisions. you are messing with middle class family….Don’t mess with middle class…. you will loose your reputation permanently…..yahi ache din hai to nahi chahiye please………Don’t expect vote from middle class in next election…whenever it will held……Please take your decision back or be ready to loose your next election for sure……

    1. Thanks for your comment Tarsem

  17. Balbirsinghnanda says:

    Lowering interest rates on PPF and SCSS is a cruel attack on senior citizens and common people.will never vote for BJP in future.Waiting when BJP govt term will end.God save us from this govt for the corporates.

    1. Thanks for your comment Balbirsinghnanda

  18. Rajkumar says:

    now at 8.1 is Somewhat ok..but every 3 months once Interest rates get changed.. so within next year Its Possible to go below 8 also definitely possible. Its highly Disappointing especially for Middle Class..Rajkum

  19. Renga says:

    If the govt is running out of cash, they should try to close all the loop holes people use to avoid paying tax, this will be a large scale exercise but they need to start doing it, not all the companies in the country is paying PF for all their employees, not all business paying correct tax – there should be raid carried out in all such companies, Govt’s one of the promise was to bring all the black money into the country which they are not concentrating on… but they are keen an find each and every way to tax the common man….. This is a shameful situation.. I have read in some of the blogs the writer has supported govt on this interest reduction, but the thing is most of the people who don’t want to invest in Equities through direct share of through MF due to lack of trust or lack of risk taking abilities, instruments like PPF, SCSS are their only hope for retirement corpus hence may not be good to reduce these interest rates..

    1. Thanks for your comment Renga

  20. Santosh says:

    Please note the other side too …. View by a expert in session I recently attended.

    With rising population & inflation it is also necessary for a economy to maintain flow of money. Money needs to be in rotation and not locked in fixed guaranteed instruments. Economies of developed counties have already gone through such bad patches. Governments executes such interest reduction steps gradually to avoid resistance. But they have to do for sustenance & job creation for next generations.

    1. Thanks for your comment Santosh

  21. Santosh says:

    I was a BJP fan but with this move in reducing interest rate on PPF I will never vote them in future if they don’t take it back

    1. Thanks for your comment Santosh

  22. Dkyamdagni says:

    This is disheartening to reduce interest on SCSS AND PPF. this will effect middle class retired peaple

    1. Thanks for your comment Dkyamdagni

  23. Atanu says:

    Is it applicable to post office deposits interest rates only or also to bank deposits. I think both.
    Please let us know

    1. Only to post office !

      1. pkpadhy23 says:

        Dear Manish Sir,
        As per my understanding the changed rates are applicable for banks PPF, SCSS schemes.
        Bank FD rates are decided by banks

  24. Matiz says:

    Dear Manish,
    Thanks for sharing such a aggregated list of interest cuts by modi mastan govt., Shame on govt., and surely BJP wont get into seat back in next elections ..

    I have a doubt, Every year i will invest as one term deposit on PPF on 1st week of Apr, Since the Interest rate is effective from Apr month, any chance I can invest now to get better interest percentage?

    1. Pras says:

      Expert advice from readers also welcome,, please provide your suggestions

    2. It will not matter .. because the interest is calculated on monthly basis. You cant lock in the interests for a long period !

      1. Pras says:

        Thanks Manish, but I didn’t meant to lock for longer period, What I meant is If I invest 30000 today, can I get Interest rate for March month with higher interest?

        1. The interest calculation happens on the balance on 5th of every month. So you have lost that opportunity !

          1. Pras says:

            Thanks Manish..

          2. Balaji says:

            Manish, I don’t think so. If I opt for a 5 Years FD, at 9% pa interest rate, it is applicable for the entire 5 Years. How come the interest rate will be altered if it is fixed for the entire tenure at the time if Opening the Deposit ?

            1. That happens in case of FD. But in PPF, its not the case, the interst is calculated on monthly basis depending on the current interest rates !

  25. bhuppi says:

    If is going to reduce inflation then, it is a welcome move. Don’t think on only one side. Govt has to do for more than one community category. it may be for creating short term loss but can have long term benefits in other way.

    1. Thanks for your comment bhuppi

  26. NaveenKumar says:

    While in short term common people think they have been dealt a bad hand by this government, this move is good in the interest of long term economic health of nation.
    Before this move interest rates were skewed and the transmission of RBI rate changes to take actual effect took more than a year. With this move the interest rate transmission cycle will become shorter. This has multiple advantages:
    1. This enables RBI to tackle inflation more effectively as the result of interest rate changes will be faster.
    2. Banks will reduce interest on loans faster.

    1. Vipul says:

      But reducing Interest Rate actually don’t help in bring down inflation. It actually do the reverse.
      So RBI may not reduce its Repo Rate based on interest rate cut. Repo rate cut is done on basis of CPI and WPI data .
      This move will help banks to improve their balance sheets, also may help real estate sector too

      With lower interest rate govt is trying to bring more cash into market and increase money flow into the system. Increased cash level in market means more spending which actually sometimes inflate prices of regular stuff.
      This will also help govt in realizing their fiscal deficit target for this financial year, thus this move is a win win situation for both banks and govt.
      As govt is saying it will quarterly review its policy on interest on small savings scheme, hope they don’t reduce it further 😀

    2. Thanks for your comment NaveenKumar

  27. vpai says:

    black money did not come in…our white money is being looted (first the try to tax epf and now this)…shame on the govt…over the top speeches and zero when it comes to action.

    1. Thanks for your comment vpai

  28. ynmurthy says:

    This rate cut is big blow to retired persons. The Govt. Rethink restore theP. O. Interest rates with immediate effect. The retired persons cannot invest their hard earned money in uncertain stock market which is highly volatile.

    1. Thanks for your comment ynmurthy

  29. Ramprabhu says:

    The difference in interest rate will be used to bail out bad loaners like this malliya guy and other cheats who this bjp govt wants to protect and save. Anyway the last flare of a flame that will die forever. Let it flare

    1. Thanks for your comment Ramprabhu

  30. Pankaj says:

    This is Vijay Mallaya Cess being collected by govt. indirectly. Many more will follow shortly. Better govt. name these rate cuts as Vijay Mallaya Cess, etc…..

    1. Thanks for your comment Pankaj

    2. Anjan says:

      This government could not tax our EPF due to massive protests, hence it’s planning to indirectly tax us by paying us less interest for these small savings scheme.

  31. Ashish says:

    This is sheer shamelessness of Modi Government. Does they want that common man also shall invest in share market & become bankrupt one day due to high volatility of share market? Common man – middle class & poor class – invest their hard earn money in debt such as NSC, Kisan Vikas Patra, Bank Deposits, PPF, etc. to get assured returns. Why this government is not interested in protecting common man’s hard earned money and want him to invest in equity market which does not assure guaranteed returns on investment. It is called DADAGIRI due to majority in assembly by BJP. Govt. want common man to invest in its high voltage advertised Pension Scheme & common man is not investing in that willingly so this punishment by Govt. to common man. Is Modi’s advisros gone MAD?

    1. Thanks for your comment Ashish

  32. Deepan says:

    Hi Manish,

    Govt slashed the interest rate for 10 Year NSC? If means what’s the new interest rate?

    1. vishesh says:

      The 10 years NSC has been discontinued following re-introduction of the KVP

    2. Read the article. Its mentioned there

  33. abc says:

    This Govt seems to ignore the fact that there is no social security by the state for citizens. No adjustment was done in tax rates to offset inflation, now, rates on small savings have been slashed. I voted for this Govt, seems I made a mistake. Will rectify next time around.

    1. Naveen says:

      Very few people in India pay tax, so as such government should not be responsible for providing social security for all citizens.

      1. Anjan says:

        Then why not provide social security to those who do pay taxes? The government is looting 3% of the population who pay taxes and then kicking them in the guts.

    2. Thanks for your comment abc

  34. Hussain says:

    After reducing the PPF interest rate to 8. 1. I would prefer to invest my money in Mutual Funds….

    1. Atanu says:

      That’s what the Govt also wants. Throw people in the share market and MF.

    2. Thanks for your comment Hussain

  35. Govind says:

    If this type of steps r taken by Mr Modi goverment(not BJP) ,he himself will face the result in all comming election,
    common man only made him PM from CM,not a single step taken by Mr MODI as PM,favors common man,than how u expect VOTE in yr favour,BJP has seen their Defeat in all comming election,thats why they have started looting this country the way congress has done,If this will continue,Mr Kejrival will be next PM,thats why JAGO MODI JAGO.

    1. Atanu says:

      Mr Kejri is no different. All are comedians.
      I still remember, Modi govt even promised no tax and to implement DTC at the time of his election campaign by see what his govt is doing to squeeze the common man. All are same… be it AAP, Cong, BJP or whatever .
      Common man will suffer the most and the salaried class will get killed mercilessly …

    2. Thanks for your comment Govind

  36. CVRaju says:

    Interest cut on PPF is a sign of anti employees policies by the Govt. This is only the product that most of the employee class like because of two things (1) tax rebate under 80cc (2) Interest rates are always little over the general bank deposit rates.
    Most of the employees they treat this accumulation as their lively hood after their retirement. Unlike US and other nations there is no social security in India and what kind of alternative that the Govt is providing for retired employees. This reduction in interest rate will lead to declaim apatite in PPF and will be tempted to go to equity market where most of the individual’s loose their money . If FM thinks that stock market is the index of economic growth and global reputation it will be a mith.
    I humbly request the FM and the Govt to think some think differently and provide a cap on Bank Fixed deposits where the senior citizens above 60 years will get 9% interest rate irrespective of ruling normal interest rates.

    1. Thanks for your comment CVRaju

  37. Suresh says:

    As a middle class guy i am totally cheated by this act. Looking for best mutual fund to move on. No govt save us, we have to save ourselves. Utterly waste move as per me.

    1. Atanu says:

      No place for middle class in our country.
      Either you be super rich or super poor. If you are in between, then god bless you my friend. 🙂

      1. Suresh says:

        It s true !!! Thanks Atanu ji 🙂

    2. Thanks for your comment Suresh

    3. Anjan says:

      The government no longer serves the common man. It is completely owned by the rich people who have the money to bend the laws according to their will.

  38. GSSanyal says:

    Decreasing the interest income of small savings is very much painful for common man who depend on this income Why don’t the govt remove the tax from this small savings entirely now?

    1. Thanks for your comment GSSanyal

  39. TAMAL says:

    Paying the price for Vijay Mallaya action.Ache din aa gaye bhai log.Just wait and see what this govt will do.

    1. Thanks for your comment TAMAL

  40. DeepakHegde says:

    It’s a shame that the Govt is proceeding to close all avenues to the common man. They already have egg on their face with the move to tax the PF withdrawals on maturity. They will have to face the public ire for the PPF rate reduction. With these anti- middle class measures, the BJP will have to pay a heavy price.

    1. Thanks for your comment DeepakHegde

  41. B.k.pandey says:

    It’s sad for the middle class and poor family.it may be a tool to stop their hobbit of saving.this is no way fruitful ….

    1. Thanks for your comment B.k.pandey

  42. VEERASWAMY says:

    The most suitable system to compensate the investors is INDEX LINKED SAVINGS where a nominal rate of interest is added to the savings and the same is adjusted with the variation in All India Comsumer Index

    1. Can you share more on this product ?

      1. VEERASWAMY says:

        Even if the interest rate is less say 4 or 5 % p.a., or less, the same has to be augmented ever with inflation rate (say 5% or 5.5% as the case may be).ie., in the particular year the effecive rate of interest is 9 to 10.5 %. Such will be the rate of interest, everly year. In case if the rate of inflation is negative, the effective rate of interest will be less than 4 or 5% as the case may be.

  43. ketan says:

    Government is more worried about share markets and industry and less worried about common man

    1. Thanks for your comment ketan

  44. RohitAnthwal says:

    Why don’t Government cut or slashes on MP/MLA Perks and Allowances. Why they find common man savings to be cut. Is this not intolerance. Should common man always suffer .

    1. Thanks for your comment RohitAnthwal

  45. pkpadhy23 says:

    My query – For people who have already invested or will invest by 31st march 2016 in KVP / Senior Citizen Savings Scheme at prevailing rates of 8.5% and 9.3% respectively will they continue to get the same rate of interest for full tenure or the return shall be as per updated Rates post April 1st.

    1. Deepesh says:

      You will get the contracted rate for the entire tenor.
      So, if you open beore March 31, 2016, you will get 9.3% for SCSS.

      1. pkpadhy23 says:

        Thanks a lot Deepak Si . …

        1. pkpadhy23 says:

          Thanks a lot Deepesh Sir….

    2. No , anyways months interest is calculated in PPF ..

  46. Rawzen says:

    Quote” These new rates will be applicable from Apr 1st. Please note that this is one of the biggest rate cuts in the small saving schemes in a long time. “Unquote
    The Fin minister has “reset” interest rates. This govt is totally against salary earners / middle class as seen from the drastic reduction announced when the real inflation (not govt so calculated) is piercing high skies. Time for the people to reset the present central set up is ripening.

    1. Thanks for your comment Rawzen

  47. Abhikumarpatel says:

    It is fair Move by indian government. ( not any attachment to BJP thought).

    Generally and ideally, Real rate should be 2 percent ( PPF rate- inflation rate). Since inflation is going downhill and RBI expected to cut the rate in comming policy for landing also. It is fair move.

    Moreover, This will give a way to Some Risky assets and eventually beneficial to stock market as whole.

    1. Amith says:

      Hi Abhikumar,

      How is your view justified that inflation is going downhill?

      Thanks,
      Amith

      1. vindo says:

        If you think it is not going to downhill, then you need to in equity or MF to beat inflation, you only prove his second point.

    2. Thanks for your comment Abhikumarpatel

    3. Anjan says:

      Do you really think inflation is going down? Just visit the market once in a while, may be then you will know the reality.

  48. ved says:

    Manish , are deposit rates going to change every quarter as per notification

    what happens with those that invest say by 31 mar ?
    will their returns change every quarter
    yes for ppf but what about say mis or rd or fds etc ?

    no one has noticed this googley and that is scary

    1. Yes, its going to change every quarter .. And anyways the interest is calculated on monthly basis. SO one cant lock in the interest rate for long term !

  49. Vasu says:

    Cutting down PPF interest rate is very bad idea. It’s a special financial instrument for common man to make some savings for retirement in a Country where social security is nil.
    I’m afraid with this kind of over enthusiastic approach the Govt. digging it’s own grave. It’s deceiving the very same people who has voted it.
    I have been supportive of govt efforts so far, but it seems the Babus (so called Economists specially inducted in to finance ministry) are misleading the govt.
    PPF always had a special status and crores of people, mainly those who can’t use EPF are solely dependent on PPF for their retirement planning. Treatment PPF at par with all other products is a foolish act.
    Why Govt is after, hard earned middle class and poor people’s money and watching largest corporate defaulters openly ‘escape’?
    Govt already taken a U-turn in case of EPF withdrawal issue, hope better sense prevails again.

    1. Thanks for your comment Vasu

  50. Shastry says:

    Sukanya Samriddhi Yojana interest down from 9.2% to 8.6%. I don’t know why the interest rate brought down when it is started by this Government it self.

    1. Thanks for your comment Shastry

    2. Anjan says:

      Rates have been cut for all small savings scheme. Why do you think special treatment should be given for Sukanya Samriddhi Scheme? I for one think its interest rate needs to be reduced and brought on par with PPF because it discriminates against the boy child.

      1. Shastry says:

        Well, thanks for the reply Anjan. I don’t care about the girl child or boy child. This scheme was launched with 9.2 % of interest, the highest for small monthly investments. If it is launched for boy child, then also i would have started saving. The future is getting automated. How it will be after 10 to 15 years is not known to any one. So I expect the interest rate on this scheme to remain the same. The stock market returns at the time of real need of money are uncertain. So expecting no rate cut is not bad at all. However the concern raised by you (in fact all) on PPF is truly appreciated as everyone is feeling a pinch of it.

  51. HG says:

    These were mostly sources of income of a class of people who have no increments, no DA and to reduce their basic income in these times of actual and practical inflation is indeed a very, very cruel blow. If the govt has any compassion , it must immediately roll back these reductions!!

    1. Thanks for your comment HG

    2. Sanjay says:

      Acche din aageye hain !!! Truely better days have come atlast. Modi ji will always be remembered by the middle class people.Go to any market near to ur residence and you can see the real rate of inflation. After selling some insurance products Modiji now reducing the post office deposit rates to almost zero ( Interest – Inflation ).It is called Jana Dhan Loot yojana.Now he will surely bring some mutual fund /stock market product under a new brand name so that retired call people and small middle class people compel to buy these products and lose their money.The present govt want to help industrialists like Bijay Malya by giving them free loans at the cost of honest taxpayers.# Shame on Modi.

  52. ankitmehta says:

    8.1% is still ok…but it shall not be revised atleast for one more year…or else this will not be an attractive avenue of investment at all

    1. Thanks for your comment ankitmehta

  53. Anjan says:

    Well this was kinda expected. Banks were lobbying for this to happen. Now I believe banks will further reduce FD rates which were not competitive to begin with. With interest rates falling everywhere, it’s not a good time for the middle class savers, that’s for sure.

    With April 1st coming up shortly, I am myself pondering whether to invest any money in PPF this year. The fact that PPF rates will be revised every quarter going forward makes it even more unattractive in a falling interest rate environment. If you can’t lock in the interest rate for any length of time, then why have such a long 15 year lock-in period? It doesn’t make sense to me.

    1. Thanks for your comment Anjan

  54. Jaideep says:

    What non sense?? If Goverent have guts bting back black money and take it from robbers like KFA and corrupt politician ….why to punish common man who put there life time savings in these schemes….

    1. Thanks for your comment Jaideep

  55. Sachin says:

    No choice in this market situation and better to be with PPF. Thanks to government for acche Din. I don’t know why they do not focus on big issues .

    1. Thanks for your comment Sachin

  56. Suresh says:

    Why BJP is targeting middle class? Middle class people considered PPF,NSC etc are safer savings options.Goverenment letting Vijay Malya flee from country who duped banks about 9000 cr.But when it comes to middle class government is even not giving option to get good returns .

    1. Anjan says:

      We all knew BJP were pro-corporates, So it comes as no surprise that they are reducing interest rates left and right to help the corporate houses as much as possible. I only hope this leads to reduction in inflation rate somewhat but the ground reality is that, prices of goods & groceries are still increasing at the same rate as before. So effectively middle & lower class is becoming poorer by the day.

    2. Thanks for your comment Suresh

  57. Sanjay says:

    Who allowed government to steal poor investors?

  58. RamG says:

    This is a punch in the gut for those depending heavily on one/two/all of these investments, viz the ‘risk-averse’ investor, in other words RAI . The sting is in the tail – more cuts likely every quarter. It’s a lesson for RAIs that you also need to consider legislative risk apart from credit risk, market risk and reinvestment risk even in debt instruments. Tax laws are NOT STATIC.
    Sad is the plight today, of the Senior citizens depending on good old debt investments like FDs, PPF, SSSC, KVP, NSC etc. But then life is never fair.

    1. Thanks for your comment RamG

  59. DrSachinKC says:

    Disappointing 🙁

  60. Atul Jadhav says:

    My PPF account is maturing on 31st Mar 2016. No second thoughts on extending further.

    1. praveen says:

      Still 8.1 % tax free interest is a good option at present. Better than any other instrument due to its tax free nature.

      1. ArunGhosh says:

        Agreed with Praveen.

        1. Ved says:

          Dont think short term
          1. u can either deposit a very small amt to keep it live
          2. else close via no further subscription but dont withdraw till u have a definite plan on what u will do with the accumulated amt

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