Revised interest rates of Post Office Schemes for 2013-14

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Today Finance Ministry lowered interest rates on few of Post Office Saving Schemes. Even though small investors may not feel the heat but investors who depend on interest income like MIS or SCSS schemes may feel the heat with this lower. I think it was better if Govt considered SCSS scheme as a separate and maintained the same interest rate. This may actually benefited our senior citizens. Below is the revised rates of all schemes.

Post Office

As I updated during previous year change in my old post, this changes will be on yearly base and above rates will be effective from 1st April 2013 to 31st March 2014. These interest rates are decreased to match with current interest rates in market. Hope this decrease will not make few risk averse investors to stay away from these schemes.

Decrease in above interest may also give an opportunity for bond market investment. But it is wise if you invest after evaluating your goal and the risk involved their too.

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16 Responses

  1. Interest rate revision will be applicable to Senior Citizen Saving Schemes existing accounts also or it will be applicable only to newly opened account?

  2. Hi Basu,
    In PPF the interest is calculated every month right. Then why it is mentioned as compounding yearly. Please comment.
    Also if NSC interest half yearly then is it not better than PPF.

    1. Sunil-Interest is yearly compounding. But principal consideration for interest is on monthly balance. Please go through my post “PPF-When to contribute to get higher returns?” you will get an idea.

      NSC looks lucrative than PPF. Their is a difference between tenure. So if your goal is 15 yrs then you can’t invest in 10 yrs NSC right? Also accrued interest on NSC is taxable, whereas in PPF it is totally exempted. NSC is a one time investment but PPF have flexibility to invest in monthly. To invest monthly in NSC, you need to create individual deposits. So from all views, PPF looks a better option than NSC.

        1. Sunil-Till March 31st 2013 old rate will be applicable. From 1st April 2013 new rate will be applicable.

  3. My 5yr RD started last month so next FY I will get lower interest than now. I am right or this is applicable to them who will start 5YR RD after today

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