On 31 March, the government cut rates on most of its small savings schemes, including the Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS) and post office fixed deposits(FDs).
PPF and SCSS saw their interest rates move from 7.9% and 8.6% in January-March to 7.1% and 7.4%, respectively, in April-June 2020, respectively.
Post office FDs saw interest rates move to the 5.5-6.7% range; banks are also offering similar rates on FDs. In this scenario, the 7.75% Government of India Savings (Taxable) Bonds, also known as RBI 7.75% bonds, look particularly attractive.
As the name suggests, they offer an interest rate of 7.75% and are issued by the government of India and, hence, carry almost no credit risk.