Small Savings Schemes Interest rates are on the down ward spiral. Finance ministry again slashed interest on these saving instruments by 0.1% (10 basis points). From the year 2016 government started reviewing interest rates on small savings schemes on quarterly basis. The aim of this is to keep the rates on these schemes inline with market interest rates. The rates of small saving schemes or (SSS) are decided based G-Sec yields (Government Securities Yield) of the previous three months.
small savings schemes are mainly postal schemes like KVP, NSC and PPF (Public Provident Fund), sukanya samrudhi scheme for girl child, Senior Citizen Savings Scheme, Post Office Monthly Income Scheme (POMIS), 5 Year Term Deposit etc.,
New Small Savings Interest Rates Effective From 01 Apr 2017
If you are unable to see the above table of new small savings interest rates effective from April 2017, you can check them in the below table.
|Instrument Name||Rate of interest w.e.f. 01.04.2015||Rate of interest w.e.f. 01.04.2016||Rate of interest w.e.f. 01.04.2017|
|5 Year Time Deposit||8.50||7.90||7.70|
|5 Year Recurring Deposit||8.40||7.40||7.20|
|5 Year Senior Citizens Savings Scheme||9.30||8.60||8.40|
|5 Year National Savings Certificate||8.50||8.10||7.90|
|Public Provident Fund Scheme||8.70||8.10||7.90|
|Kisan Vikas Patra||8.70||7.80||7.60|
|Sukanya Samriddhi Account Scheme||9.20||8.60||8.40|
As can be seen from the above table, interest rates on these savings schemes are on the declining path and are expected to be so in future too. For example from an interest rate of 8.7% in 2015, it is now 7.9% for PPF. Except for savings account deposit, all have declined from a range of 0.6% to 1.2%.
These declining trends in these schemes is a big blow to small investors. Most investors in rural and semi-urban areas invest in such schemes. Although the rates are in declining mode, still investors can opt to invest in them as they are offering better returns than other similar risk bearing instruments. But the problem is are the investors in such schemes can get inflation adjusted positive returns?
Most probably NO. Specially if some one is saving for their children’s needs like higher education and marriage. Inflation of education or marriage expenses increase more than popularly measured CPI inflation. So even if they give CPI adjusted positive returns, still one can not have enough corpus to reach their goals.
What can be done then? The obvious answer is invest in equities and equity related instruments for long term goals like children education, marriage. One can choose them even for retirement planning, providing they are starting early for this purpose.
How the Small Savings Schemes Interest Rates are Decided?
As per the recommendation of Shyamala Gopinath panel, the interest rates of small savings schemes (SSS) are declared every quarter based on the formula. The formula for calculation of interest on small savings schemes considers Yield on Government Securities of last three months. But these schemes offer little higher interest rates than G-sec Yields. Government offer higher interest rate spreads than market yields to encourage small investors to opt for these instruments. Small investors can still benefit by investing in such schemes as they offer higher interest rate than existing market yields.
Interest Rate spreads on small savings schemes
PPF (Public Provident Fund) – 25 BPS (basis points)
Senior Citizen Savings Schemes – 100 BPS
Sukanya Samridhi Scheme – 75 BPS
5 Year Time Deposit – 25 BPS
National Savings Certificate (NSC) -25 BPS
Monthly Income Scheme (POMIS) – 25 BPS
These are the additional percentage given to investors in particular schemes in addition to the 3 month G-Sec Yields.
NSE (National Stock Exchange) is adding another 15 new securities in futures & options segment from Today.
|Sl No||Company Name||Symbol||Lot Size|
|1||CAPITAL FIRST LIMITED||CAPF||800|
|2||DALMIA BHARAT LIMITED||DALMIABHA||300|
|3||EQUITAS HOLDINGS LIMITED||EQUITAS||3200|
|6||INTERGLOBE AVIATION LIMITED||INDIGO||600|
|7||INFIBEAM INCORPORATION LIMITED||INFIBEAM||400|
|8||MAX FINANCIAL SERVICES LIMITED||LIMITED||1000|
|9||MUTHOOT FINANCE LIMITED||MUTHOOTFIN||1500|
|10||PIRAMAL ENTERPRISES LIMITED||PEL||300|
|12||RELIANCE DEFENCE AND ENGINEERING LIMITED||ENGINEERING||9000|
|13||SHREE CEMENTS LIMITED||SHREECEM||50|
|14||SUZLON ENERGY LIMITED||SUZLON||30000|
|15||UJJIVAN FINANCIAL SERVICES LIMITED||LIMITED||1200|
Before this, total number of contracts available for trading in f&o segment is 185. These include Indian securities, Indices like Nifty, Bank Nifty and foreign indices like FTSE. With addition of these 15 new stocks in f&o segment, the total number of contracts available in derivative segment has increased to 200.
Source NSE F&O segment circular Download Ref No : NSE/FAOP/34443 Date : March 22, 2017.
Here are the position limited for the above stocks.
|Sl No||Symbol||Quantity Freeze|
KOTAK 811 with 6% Interest Rate
Kotak Mahindra Bank came with a new creative disruptive account Kotak 811. It is aimed at increasing digital transactions. The best part is it costs Zero for investors to open the account.
Requirements to open Kotak 811
Kotak 811 account can be opened with A valid AADHAR Number and PAN Number issued by Income tax department. Customers need to download the mobile app from Google play store.
Features of 811 Account by Kotak
Up to 6%* interest p.a.
Benefits of 811 Accounts from Kotak
Investors can earn up to 6% interest on the balance in their savings account. Best of the 811 account is it does not require any minimum balance. So no worry of maintaining minimum balance every month like in other savings accounts. Account can be opened in flat 5 minutes from the mobile app downloaded in the mobile. Once AADHAR number is entered, client gets an OTP from UIDAI and same need to be entered in the app for verification. All clients are provided with virtual debit card which can be used for all shopping and other online payments. In store purchases can be paid with scan & pay option. IMPS / NEFT transactions on mobile and net are FREE OF CHARGE.Complete full KYC and upgrade your account. Total credits up to Rs. 2 lakhs in a financial year and maximum balance not exceeding Rs. 1 lakh. Valid for 12 months from the date of account activation
Can 811 account opened without AADHAR?
Yes. Account opened without AADHAR is known as 811 LITE. This is opened even if client have AADHAR but could not authenticate their OTP number. There are some limits on this 811lite account opened without AADHAR verification. Transactions are limited per month to 20000 rupees. It is the same limit applicable to other online wallets like PayTM, Freecharge etc., Beyond this one will not be able to transact for the particular moth. The account is valid for 3 years from the date of activation. One can validate the account before that and upgrade to normal 811 account by completing KYC.
How to open Kotak 811 and Kotak 811 lite accounts?
To open either kotak 811 or kotak 811 lite one need to download the mobile app from google play store. Open the app and enter AADHAR number and verify the same with One Time Password. If AADHAR number is not available one can still open the account. In this case a call from the bank will help to complete the registration process. Apart from AADHAR one need to enter PAN Number, Occupation, FATCA Declaration and Annual Income etc., Existing Kotak customers need to enter Customer Relationship Number (CRN), Debit / Credit Card PIN or Net Banking password to get started. The app will take through a one-time activation process when you login for the first time.
*Earn 6% p.a. interest on savings account balance over Rs. 1 Lakh and up to Rs 5 crs. Earn 5% interest on savings account balance up to Rs. 1 lakh and 5.5% p.a. interest on savings account balance above Rs. 5 crs. Applicable for Resident Accounts only. Interest rates are subject to change from time to time. Please visit www.kotak.com for the latest information on interest rates.
Kotak 811 is to Banking what Reliance Jio is to telecom industry. At a time when banks like SBI are planning to introduce or hike minimum balance amounts, its great relief to people who are worried with keeping minimum balance in their accounts. Its a good value proportion to customers and need not to worry hectic penalties for non-maintenance of minimum balances in their savings accounts.
Also all IMPS and NEFT transactions are free of cost. Recent Reliance Jio launch and drastic decrease in data charges will augment well for penetration of this initiative. It will help to increase the growth rate of digital transactions in India.
To open a kotak 811 account download mobile app from google play store or visit Kotak Mahindra Bank website.
On the occasion of Diwali (Laxmi Poojan Day), diwali muhurat trading 2016 will be conducted on Indian Stock and Commodity Exchanges. This special trading session is held on Sunday, October 30 for this year. This is the time of the year when most investors take a fresh look at their portfolios. Symbolic buying is done during this diwali muhurat trading session by most investors who even do not buy on other days. Most research houses and brokers already came up with a list of best bets for coming year. Although most people believe that markets are fairly priced at this time, many stocks in small and mid cap space can provide huge appreciation going forward.
Diwali muhurat trading 2016 timings on NSE, BSE, MCX and NCDEX
|Exchange||Timings (Normal Market Session)|
|NSE||18:30 to 19:30|
|BSE||18:30 to 19:30|
|MCX||18:30 to 19:30|
|NCDEX||18:30 to 19:30|
Muhurat trading session is an occasion for the start of a traditional new year for trading communities specially in Northern India. Diwali Muhurat trading takes place after stock brokers perform laxmi pujan. Most people use this session to place token buy orders with a view to held them perpetual. Some traders usually book small intraday profits hoping the same fortune will follow throughout the year 🙂
Timings for Diwali muhurat trading change every year and are announced by stock and commodity exchanges a few days before the day. This year the regular market session is for 1 hour duration along with pre open session and post closing market session.
Diwali Muhurat Trading 2016 – 30 Oct 2016
Dhanteras Extended Live Trading On 28 Oct 2016
On the occasion of Dhanteras, Dhanteras live extended trading session is conducted on 28 Oct 2o16. It is extended session after regular market hours. Live session is available on both BSE (Bombay Stock Exchange) and NSE ( National Stock Exchange). Trading is only available in Sovereign Gold Bond (SGB) and Gold Exchange Traded Funds (ETF) securities . During this session Trading is not allowed in regular Stocks and Futures and Options Segments.
Timings of Dhanteras Extended Trading Session
This Dhanteras Extended Live Trading Session 2016 is in addition to normal trading session on Friday. It is open from 4:30 in the evening to 7:00 for 2:30 minutes duration.
Post Closing Session for GOLD ETF securities and Sovereign Gold Bond (SGB) Securities after extended live trading session is NOT available.