Being Risk Free With Low Returns

For generations, small saving schemes like Public Provident Fund (PPF) have been among the most trusted investment instruments for the salaried class, along with fixed deposits, real estate and gold. However, in recent times, the returns on these investments have been falling. Be it PPF, or Senior Citizens Savings Scheme (SCSS) or National Savings Certificate (NSC), the interest rates on all these schemes have fallen by around 1-2 per cent over the last five years or so. PPF used to give a return of 8.7 per cent in 2014-15, which has now come down to 7.1 per cent, whereas NSC’s rate of return has dropped to 6.8 per cent during this period. SCSS interest rate during this time has fallen dramatically from 9.3 per cent to 7.4 per cent. In April this year, the interest rate on PPF was cut sharply by 80 basis points from 7.9 per cent to 7.1 per cent. And with consistent decline in...