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Morning Brief: Cold savings realities: Is the interest rate cycle on small savings schemes bottoming out?


Morning Brief (ET Bureau)
Rachita Prasad | 23:58 Min | April 06, 2021, 8:00 AM IST
The government s overnight u-turn on the slashing of interest rates for small savings schemes raised eyebrows. Financial planner Melvin Joseph and ET s Sugata Ghosh talk about the significance of such schemes and suggest that even though a cut remains imminent, the interest rate cycle may be bottoming out.
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Sugata Ghosh , Melvin Joseph , Small Savings Schemes , Overnightu Turn , Interest Rate Cycle , Interest Rate Cut , Financial Planner , மெல்வின் ஜோசப் , சிறிய சேமிப்பு திட்டங்கள் , ஆர்வம் ரேட் மிதிவண்டி , ஆர்வம் ரேட் வெட்டு , நிதி திட்டமிடுபவர் ,

Should interest rates of small savings schemes be cut? Experts are divided on the matter


Should interest rates of small savings schemes be cut? Experts are divided on the matter
Synopsis
Experts are divided on whether rate cuts are necessary or not.
The government slashed small savings interest rates on 31 March, only to withdraw the order the next day. ET Wealth speaks to experts to get their views on this issue.
Ajit Menon CEO, PGIM India AMC: No
81906720The argument to dereregulate small savings rates arises primarily from the concern that higher rates can impede rate transmission. Banks have flagged this as a reason for sluggish deposit growth and inability to lower lending rates.
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West Bengal Assembly polls: Priyanka Gandhi, Trinamool's Derek O'Brien Mock Nirmala Sitharaman's Interest Rate U-Turn


Priyanka Gandhi hinted that Nirmala Sitharaman s U-turn was influenced by the ongoing polls.
New Delhi:
Congress leader Priyanka Gandhi today asked Finance Minister Nirmala Sitharaman if the Centre s overnight flip-flop on small savings scheme interest rates was a case of oversight as claimed or one of election-driven hindsight . She tweeted shortly after the latter posted on the microblogging site early this morning withdrawing the steep cuts in rates announced yesterday, the last day of Financial Year 2020-2021. The Trinamool Congress, battling the BJP furiously in West Bengal, also mocked the Union government.
Yesterday s announcement by the Finance Ministry saw interest rates on schemes such as the National Savings Certificates and Public Provident Fund (PPF) being cut of up to 1.1 per cent for the first quarter of 2021-22 in a massive blow to middle-class depositors. With this, the PPF rates stood at a four-decade low. ....

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Folks investing in PPF or Sukanya Samriddhi scheme need not worry⁠ — the rate cuts have been rolled back


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Folks investing in PPF or Sukanya Samriddhi scheme need not worry⁠ the rate cuts have been rolled back
Folks investing in PPF or Sukanya Samriddhi scheme need not worry⁠ the rate cuts have been rolled back
Rounak JainApr 1, 2021, 09:51 IST
Finance Minister Nirmala Sitharaman has announced a roll-back of interest rate cutsBCCL
The government has withdrawn its interest rate cut order, bringing relief to Indians who invest in small savings schemes.
The initial order announced cuts as sharp as 1.1% points, with some of the schemes barely beating the prevailing inflation rate.
Finance Minister Nirmala Sitharaman said that the initial order was ‘issued by oversight’.The Indian government had declared late evening on March 31 that small savings schemes including savings deposits of up to 5-year duration, Public Provident Fund (PPF), Sukanya Samriddhi scheme, Senior Citizens Savings schemes, and more will yield much lower interest than they do no ....

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