Post office schemes have been a relied form of investment for decades now. Every household who has ever bothered with investment schemes has, at least once, either invested in post office schemes or has considered doing so. The Central government, in light of the popularity of post office saving schemes, has introduced some amendments to the schemes.
To begin with, the interest schemes have been revised and the interest rate table now stands to look different than what it has in the last couple of years.
It is noteworthy, however, that this amends in the interest rate would be only for the quarter October 1st, 2020 to December 31st 2020.
What are the Post office scheme that will receive the change in interest rates?
The following schemes will notice a difference in interest rates offered in the coming quarter.
- Time Deposit – TD
- Public Provident Fund – PPF
- Sukanya Samriddhi Certificate
- Senior Citizen Savings Schemes
- Recurring deposit – RD
- National Savings Certificate
- Kisan Vikas Patra
- Monthly Income scheme
|Name of the scheme||Interest rate from 1/10/2020 – 31/12/2020||Compounding frequency|
|Time deposit – 1 year/2 year/3 year||5.5%||Quarterly|
|Time deposit – 5 year||6.7%||Quarterly|
|Recurring Deposit – 5 years||6.7%||Quarterly|
|Senior Citizen Savings Schemes||7.4%||Quarterly|
|Monthly Income scheme||6.6%||Monthly and Paid|
|Kisan Vikas Patra||6.9% (matures in 10 years and 4 months)||Yearly|
|Sukanya Samriddhi Account scheme||7.6%||Yearly|
In case you wish to receive more information about Post office schemes and revised rates, you can visit the official website: indiapost.gov.in
Why should investors be happy about these changes?
Times have been rough lately. With the pandemic causing global mayhem, markets have crashed far and wide. The Indian economy, which wasn’t doing all that well at the start of the year, to begin with, has plummeted leaving investors, businessmen and entrepreneurs flummoxed all across the nation.
With millions going out of jobs, the economy quite clearly is struggling and investors have been worrying about the money they have put in the market yet.
With the government releasing these amends in interest rates for Post office investors, a certain fraction of the investors can breathe easy now, as these rates are relatively higher than what even private banks and the economy is offering at the moment.
People who have always looked down on investments have relied on savings account interests all this while, however even those have plummeted in the last couple of months. A State Bank of India savings account would now earn you just 2.7% per annum.
Kotak Mahindra Bank, which has always prided on the high interest rates it has offered – which was 6% at one point – has now come down to offering just 3.5%.
Summing it up
Post office investing, at the moment, seems to be the right choice for investors beginning out. This will have dual effects: not only will the government offer you higher returns, but the money you as an investor put in will allow the economy to grow, and eventually the investment you put in will yield you much higher returns.
That’s one way of making the adversity work out for you!