Your plans to invest in the Nation Savings Certificate (NSC) and Public Provident Fund (PPF) may earn you lower interest as the government is set to bring into effect revised interest rates for these schemes from April 1, 2013. As per the revised interest rates, deposits in NSC will earn 8.8% interest instead of 8.9% and 8.7% for PPF instead of 8.8%.
For the non-risk takers PPF and NSC are amongst the safest investment options and the decrease in their interest rates by 0.10 % can leave them searching for other options. Aggressive investment options have a high-risk and high-returns tag attached to it, which most people specifically people with fixed monthly incomes do not easily get into. For them government schemes like these are ideal interest earners as they can rely on them. But the diminishing interest rates might prove to be a decision changer.
A ten year investment giving 8.9% returns may not push investors
towards NSC, instead this can strengthen their faith in gold as a much
profitable investment option. Looking at the rate at which the yellow metal’s
price has risen over ten years from (2001-2011) it surely emerges as a
lucrative option. The chart below will make the picture clear:
Source: simpletaxindia.net
The options for the no-risk investors are limited, further
decreasing the interest rates would only add on to shrinking savings.
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