Will interest rates in post office schemes go up?
Lalit Suri, Chandigarh
Ever since the Finance Ministry linked the interest rate on small savings, such as post office schemes to market rates, these have been revised almost every quarter, barring a few which are reset annually. The result of this action over the past 3-4 years has meant that interest rate on small savings, including the NSC and PPF has been on a decline. The trend is unlikely to reverse anytime soon for them to go up. If you are solely dependent on interest earnings from such schemes, brace up for tough times as the returns barely match inflation, forget beating it. In the long run, you will be better placed to consider exposing your savings into investments, with an element of equities, which is the only asset class that has the potential to beat inflation in the long run.
