Small savings interest rates hiked after a long span of years

An attempt to encourage small savings, promote welfare of senior citizens & girl child.

The government has hiked interest rate on small savings including NSC and PPF by up to 0.4 %. The decision is aimed at encouraging small savers, girl child and improve financial security of elderly. From 1st October 2018, the government has increased returns on girl child saving scheme Sukanya Samriddhi Yojana from 8.1 % to 8.5 % and on Senior Citizen Saving Scheme from 8.3% to 8.7%.

The interest rate on almost all small saving schemes has been declining since April 1, 2012. The interest rate on popular Public Provident Fund (PPF) has been increased to 8% from 7.6%. The interest rate on PPF deposits was as high as 8.8 % on 2012. Since then it reduced gradually. Interest rate on Kisan Vikas Patra (KVP) is hiked to 7.7 % against 7.3 earlier. However, interest rate on Savings deposits has been retained at 4% annually. Term deposits of 1 to 3 years will fetch 0.3% higher interest rate that earlier. 

Fees on Fund Mutual investment cut down . SEBIs decision - Investors benefit

Security and Exchange Board of India has taken decision to cut down the annual fees  laid by mutual fund companies by about 1% thus benefiting investors.Though the decision will affect revenue of mutual fund companies, it will be cheaper for investors to invest in mutual funds. Fees deduction will obviously boost investments in mutual funds.

Mutual fund companies laid a maximum 2.25 to 2% fees (Expense Ratio) to investors for managing there money. On Tuesday 18th September 2018. SEBI has approved the proposal of cut in these fees. Accordingly about 1.25% to 1% fees will be applicable henceforth. Consequently the commission of mutual fund distributor will be reduced by 0.15 to 0.2 percent. Normally total commission of mutual fund distributors ranges from 0.2 % to 1% depending on type of Mutual fund.

In 1999 mutual fund investments were 79.5 thousand crores. Today mutual fund investments has grown above 25 lakh crores.