Small saving interest drop further !

Today mornings headline in the  newspapers..

Mint: Govt cuts small savings interest rate by 0.2 percentage points.

http://google.com/newsstand/s/CBIwh5rvoTc

As I have been talking before these are linked to the overall interest rates and inflation in the economy and are reset every quarter.

These will help the interest rates offered by banks to go down further... but there are repercussions on all.of this in your financial planning

1.  Education inflation is not dropping.  You should still consider that at 10% if not 12%. Hence if you were trying to fund it through a ppf you will need to deposit the full amount because education is growing at 4% more than a ppf.

2. You are being forced ( by market conditions ) to move to higher risk assets... it makes more sense to study and use the SIP method over the longer time frame.. both for equity or debt.

3. Long term debt funds will drop further as they lock in these interests for some more investing .  Best to be in short funds.

We need to be aware of the surroundings and keep the right strategy for Investments ..

Keeping the focus... that's simplefinancialsense