Inflation Indexed National Savings Securities Cumulative (IINSS-C)
December 20, 2013 1 Comment
All of us have probably woken up to similar ads in our daily newspapers:
Ever since I woke up this morning I have been asked for my gyan on the matter at least a dozen times,so here it is:
You can find all the details of the scheme here:Link and before you ask:There are no tax incentives to invest in these bonds.
As for my take on whether these are a good investment?My answer is that the answer is in these words in the notification:
final combined CPI will be used as reference CPI with a lag of three months (i.e. final combined CPI for September 2013 would be reference CPI for all days of December 2013). In case of change in the base year, the base splicing method will be used.
So if the government/RBI chooses to be honest,it might be a good deal.But if the combining(averaging?) and change in base year is used as a means to reduce interest rates,i.e. financial repression,this product might be no better and probably worse than many PO small savings schemes with pre-declared interest rates for the tenure.
So,wait and watch before consigning larger sums of money in this product.