14 May, 2021

A Time To Lock-In

Even as the economy is looking upwards, many swear by sedate government policies

A Time To Lock-In
For nearly five years now, returns from government small savings schemes have been falling in line with the general trend in interest rates. For instance, the interest rate on the public provident fund (PPF), the tax-saving lifeline of the salaried, has shrunk from 12 per cent in January 1999 to 8 per cent currently. Yet, these tried-and-trusted savings options of middle-class Indians continue to find more and more takers every year, growing in appeal to attract people in higher-income groups also.

Safety and returns. Today, when the stockmarket is on a roll, gold prices are touching new highs, real estate prices are finally beginning to crawl up, individuals still swear by these sedate government schemes. One such faithful is Vishal Athwani, 28, married with two kids. This Mumbai-based businessman embraced small savings schemes four years ago, and makes it a point to invest around Rs 75,000 every year in Kisan Vikas Patra (KVP) and National Savings Certificate (NSC) towards his children's future. His loyalty stems from the government tag these instruments carry,...

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