Advice

Why PPF interest rate is going down?

Why PPF interest rate is going down?

Interest rates are pegged to yields of the government securities of similar maturity. Plus, there is a markup added by the government. So, on PPF the mark-up is 0.25\%. “They have a reason to cut the interest rate on small saving schemes as G-sec yields have fallen since last time rates were changed.

Is PPF interest rate reduced?

With the cut, interest rates on small savings schemes would have been reduced by a total of 110-250 bps during the current year. After this cut, the interest rate on PPF interest rate would have fallen below 7\%, the first time since 1974, a 46-year low.

Why are interest rates cut?

Fed rate cuts are designed to lower interest rates throughout the economy and make it cheaper to borrow money. As a result, newly issued debt securities offer lower interest rates to holders while existing debt that carries higher interest rates may trade at a premium—that is, prices in the secondary market may rise.

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Is Sukanya samriddhi interest reduced?

Interest of Sukanya Samriddhi Scheme was reduced to 6.9\% from 7.6\%. Government had reduced the interest on Small Savings Schemes with effect from April 1, 2021. Interest of Sukanya Samriddhi Scheme was reduced to 6.9 per cent from 7.6 per cent.

Which is best NSC or PPF?

As far as the interest is concerned, PPF interest is tax-free, whereas, NSC interest is taxable and will be added to your taxable income. However, the interest in NSC is also eligible for deduction under Section 80C of the Income Tax Act. It is better to pay tax on the accrued interest annually rather than on maturity.

What is PPF interest rate today?

7.1\%
As per the ministry circular, PPF will continue to earn 7.1\%, the NSC will fetch 6.8\%, and the Post Office Monthly Income Scheme Account will earn 6.6\%. Here is a look at the interest rates on various small savings schemes for the third quarter of FY 2021-22.