Investing In Era Of Low Interest Rates

The Reserve Bank of India (RBI) in June lowered its key-lending rate for commercial banks to 5.75 per cent, the lowest in the last nine years. This was the third such cut this year in as many monetary policy committee meetings, and more cuts are likely to happen as the central bank also changed the monetary policy stance from neutral to accommodative. What this means is that interest rates may fall further in the coming months. Meanwhile, the Central Government also lowered the interest rates on small savings schemes – including the Senior Citizen Savings Scheme, National Savings Certificate Scheme and Public Provident Fund (PPF) – by 10 basis points. While the interest rate for the five-year Senior Citizen Savings Scheme was lowered from 8.7 per cent to 8.6 per cent, interest rate on PPF deposits and five-year National Savings Certificate came down to 7.9 per cent from...