There may be just about a day left for you to lock-in your money in post office deposits at a higher rate of interest. Before the start of every quarter of the year, the government sets the interest rate on the post office small savings investments such as National Savings Certificates (NSC), KVP, Time-deposits, Public Provident Fund (PPF) etc. For the existing quarter of October to December, the rate of interest was kept constant as that of July to September. The government may declare the small savings interest rate for the quarter January to March 2020 soon. Is this the last chance to get a higher interest on your deposits?
The interest rate on bank fixed deposits offered by most front line commercial banks are in the range of 6.25 per cent per annum to 6.5 per cent per annum. Comparatively, the post office schemes are offering a higher rate of interest of around 7.5 per cent and even higher.
As the interest rate is looking to fall in the short to medium term, PO schemes appear attractive. However, predicting the rate of interest over the long term is a difficult task. Invest in PO schemes based on your risk profile and long term goals into the context. And, remember except PPF and SSY, the interest earned in all other PO investment is taxable.
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