Interest rates of small savings schemes are linked to the government bond yields and are recalibrated on a quarterly basis. We asked experts about the recent rate hike and how investors should look at them.
Vishal Dhawan, founder and CEO, Plan Ahead Wealth Advisors
Interest rates will continue to go up
The recent round of interest rate hikes on the small savings were long overdue. However, the correlation between increase in yields and small savings rates have been less than perfect thus far. Planning the strategy for investments in small savings has been a challenge as investors have to wait and watch to hear on the interest rate changes rather than use the government yield-related formulae to predict possible rate changes.
