Interest rates on Small Saving Schemes have been cut substantially, the cut has been very steep in popular investment among retirees the Senior Citizen Schemes, and working class PPF. The impact of the cut will be immediately seen in PPF & Sukanya Samriddhi Yojana, as the lower rate will be applicable for the accumulated balance, for rest of the schemes, the new rates will be applicable only for the new investments from 1st April 2020, the earlier investments will continue to get the old rates.
Though i agree that the Government had no other option, but i feel at least for the Senior Citizen Scheme and Sukanya Samriddhi Scheme the cut should have been bit less. The schemes are meant for a specific purpose and the government should try to encourage people to participate in Sukanya Samriddhi scheme in a big way.
For working class, if you are contributing in PPF, you have another option called VPF (voluntary provident fund), if you are eligible / if your company has that facility you can add on the same, as it will give you more interest income.
Happy Investing
RaVi
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