Small savings schemes, which give the twin advantages of a government guarantee and various tax benefits, have been the automatic choice for most investors for their debt portfolios
The Central government last week (April 1, 2021) provided a major relief to lakhs of investors in small savings schemes by withdrawing its previous rate cut order. Union Finance Minister Nirmala Sitharaman had said that interest rates for all saving schemes which existed in the last quarter would continue. Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn, Sitharaman had tweeted. A day before, steep cuts in rates of various small savings schemes like PPF, SCSS and NSC were reported.
Now that the small savings scheme interest rates remain unchanged for the ongoing quarter, a large number of people are curious to know whether these schemes are still good for investing. Shouldn’t one go for mutual funds or equities for better returns? We talked to Rachit Chawla, CEO & Founder, Finway FSC, to find an answer.