Join Courses
Attend Webinars
Get Free Counselling
  • Select Language
    • Hindi
    • Bengali
+91 9903 222 555
Elearnmarkets - Financial Market Learning
Join Courses Of Elearnmarkets
  • Basic Finance
  • Technical Analysis
  • Fundamental Analysis
  • Derivatives
  • Financial Planning
  • Miscellaneous
No Result
View All Result
  • Basic Finance
  • Technical Analysis
  • Fundamental Analysis
  • Derivatives
  • Financial Planning
  • Miscellaneous
No Result
View All Result
Elearnmarkets - Financial Market Learning
Home Basic Finance

Rates on Government Schemes Slashed for the April-June quarter

Elearnmarkets by Elearnmarkets
April 6, 2020 - Updated on November 18, 2020
Reading Time: 3min read
0
229
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Hindi: आप इस लेख को हिंदी में भी पढ़ सकते है|

Key Takeaways

  • Following the economic downturn due to COVID-19, the Government has announced a fall in the interest rates of various small savings schemes.
  • The Public Provident Fund and the 5-year Recurring Deposits have been affected the most by this decision.
  • These rate cuts have major implications for investors who have majorly chosen these schemes to invest their money in.

Following the RBI’s cuts in interest rates to counter the economic crisis, on 1 April, 2020, the government of India announced massive rate cuts on various small savings schemes.

This is the first revision in interest rates made for some of these schemes since 1 July, 2019.

These rates will be applicable for the first quarter of the financial year, from 1 April, 2020 to 30 June, 2020.

Some of the schemes which have been affected include the following –

  1. The Sukanya Samriddhi Yojana, which previously held an interest rate of 8.4%, has been slashed to 7.6% (compounded annually).
  2. The interest rate of the Kisan Vikas Patra has been reduced from 7.6% to 6.9% (compounded annually).
  3. The Public Provident Fund scheme, which previously held a rate of 7.9% (compounded annually), has been reduced to 7.1%. This is the lowest rate this scheme has offered in the last 43 years.
  4. The National Savings Certificate scheme now has a reduced interest rate of 6.8% (compounded annually), which was previously 7.9%.
  5. The Senior Citizen Savings Scheme with a previous interest rate of 8.6%, is now on 7.4% (compounded quarterly and paid).
  6. The interest rates on one, two, and three-year deposits have fallen from 6.9% to 5.5% (compounded quarterly).
  7. The interest rates on 5-year recurring deposits have seen the highest cut, from 7.2% to 5.8% (compounded quarterly).

Effect of rate cuts on the economy

The interest rates have been driven down at this point so that people are discouraged to deposit their money in these schemes.

When people will stop deposits in these schemes, the burden of the government to pay interest in these schemes will fall, thus leaving more assets for them to deal with the economic downturn.

A cut in the rates of small saving schemes can also encourage retail banks to decrease their deposit rates as they are dealing with the economic losses of the pandemic as well.

Effect of rate cuts on investors:

The people who have already made investments in these schemes can take this as an opportunity to shift to the stock market as a better investment avenue.

This is because the market will remain free from any government interference and will provide higher returns than these schemes at this point.

Investors who haven’t begun investing in the stock market yet, can start with creating an SIP or a Systematic Investment Plan, as it caters to long-term objectives.

Happy Learning!

Tags: basicenglishgovernment rate cutgovernment schemeRBISocial security benefits
ShareTweetShare
Subscribe To Updates On Telegram Subscribe To Updates On Telegram Subscribe To Updates On Telegram
Previous Post

স্টক মার্কেটের ২৫ টি গুরুত্বপূর্ণ পরিভাষা

Next Post

ट्रेडिंग के 10 महत्वपूर्ण नियम

Elearnmarkets

Elearnmarkets

Elearnmarkets (ELM) is a complete financial market portal where the market experts have taken the onus to spread financial education. ELM constantly experiments with new education methodologies and technologies to make financial education effective, affordable and accessible to all. You can connect with us on Twitter @elearnmarkets.

Related Posts

Basic Finance

Retail Trading Benefits – Why to opt for Retail Investing?

December 24, 2020 - Updated on December 26, 2020
650
Basic Finance

Digital Gold Investment – How to Invest in Gold during Covid?

November 7, 2020 - Updated on January 15, 2021
2.5k
Basic Finance

5 Best Ways to Deal with Stock Market Fear

October 28, 2020 - Updated on November 18, 2020
1.4k
Basic Finance

5 Common Mistakes in Trading to overcome this Navratri

October 21, 2020 - Updated on November 18, 2020
633
Next Post

ट्रेडिंग के 10 महत्वपूर्ण नियम

ট্রেডড ভলিউম এবং ডেলিভারি ভলিউমের অন্তর্নিহিত পার্থক্য

How to Trade with Inverted Hammer: Candlestick Pattern

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Follow Us

Download App

Register on Elearnmarkets

Continue your financial learning by creating your own account on Elearnmarkets.com

Register Free Account

GET ARTICLES ON EMAIL

Enter your email address:

Categories

  • Banking
  • Basic Finance
  • Bonds & Fixed Income
  • Budgeting & Savings
  • Capital Markets
  • Charts
  • Charts, Patterns & Indicators
  • Commodity, Currency & FOREX Market
  • Derivatives
  • ETFs & Mutual Funds
  • Financial Planning
  • Financial Statement Analysis
  • Fundamental Analysis
  • Macroeconomics
  • Market Analysis
  • Market Updates
  • Market Wrap
  • Marketshala
  • Miscellaneous
  • Open Interest
  • Personal Wealth
  • Retirement Planning
  • Sector Analysis
  • Tax Planning
  • Technical Analysis
  • Trading Terms, Rules & Strategies
  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling

© 2020 Elearnmarkets All Rights Reserved

No Result
View All Result
  • Article Categories
  • Basic Finance
  • Derivatives
  • Financial Planning
  • Fundamental Analysis
  • Market Analysis
  • Miscellaneous
  • Technical Analysis
  • Select Language
    • Hindi
    • Bengali
  • Learn finance
  • Browse Courses
  • Webinars
  • Free Guides
  • Get Free Counselling

© 2020 Elearnmarkets All Rights Reserved