It is true that Indian equity markets have done poorly for the last couple of years. The mood is no doubt terrible, more so for new investors who are going through this pain for the first time.

Look at the table which shows how the last 1/2/3 years’ Nifty50 returns are -9.7%, -6.8% and 4.7%, respectively. And boring Fixed deposits, on the other hand, have quietly done much better. Put the two side by side today, and the FD looks like the smarter choice. But this is just a present day snapshot. And it is taken at the most uncomfortable point.

Measured from a market peak, and especially mid-drawdown, an FD will often look better than equities. Sometimes for longer than feels reasonable (like today when 1/2/3 year returns of equity vs FD strangely show FD winning vs equities). Investors who made this comparison during past falls reached the same conclusion. The FD was ‘winning’ back then also. But run it after the recovery that followed, and the conclusion flipped. Which one is right depends on the return you actually realise over a full horizon, not on how the market has behaved in the last two years.

You can’t benefit from long-term investing if you can’t accept that long term is made up of ‘good’ short terms as well as ‘bad’ short terms. History and maths support this, even if it may not seem obvious right now. But keeping the faith during the dark moments of equity markets is what benefits you the most when the tide turns. It is not easy I know. But it is simple and what works. History shows recoveries have followed past drawdowns. It does not tell you when this one ends.

The costly mistake is treating a mid-drawdown scoreboard as a reason to act. Stopping the SIP, or exiting because the FD currently looks ahead, converts a paper loss into a permanent one. In most such episodes, that is what separated investors who eventually came out ahead from those who locked in the worst of the fall.

This is not an argument that the ongoing brutal phase of the markets is over or that equities would bounce next week or next month or next quarter. They may. They may not. The useful question here is – Are you judging a long-term allocation on a comparison that looks decisive only because you stopped the clock at the painful moment? If yes, the FD is not winning. You are just looking too early.

Now to be fair, adding money when markets are falling feels deeply uncomfortable, and almost irrational, if not scary. You will always wonder what if markets fall a little more? And if they fall another 5-10% after you have invested, that pain aggravates enormously. Remember, markets don’t do what you want them to do on your demand. But from whatever experience I have in markets, it pays to stay calm and remain objective. It helps to believe that Remember God in Good Times & Equities in Bad Times, and that Cash + Courage + Crisis makes real Wealth. Easier said than done, but that is how it is.

Equity investing should be done for the long term only. And in the long term, there will always be short phases when the markets will be volatile and give negative returns. This is completely normal, and you should accept it.

So if your goals are long-term and still several years away, then ideally you should be investing more as markets fall. Or you can stagger your surplus over a few months for better peace of mind. You can even rebalance your existing portfolio if you don’t have fresh surplus to invest. Instead of fearing a falling market, view it as an opportunity to invest at lower levels so that your future profits increase. A consolidating or falling market is not a disappointment. Rather, it is a market that is quietly doing the most important work for investors: rebalancing the risk-reward equation back in favour of them. So it is precisely the setup that resilient long-term investors should welcome!

Also wrote this on X (link)

The post Is it Right to Compare Low/No Nifty50 returns presently with Bank FD rates? appeared first on Stable Investor.

Between Sep-2022 and Sept-2024, the Nifty50 delivered four straight half-years of strong returns: 1.5%, 11.6%, 12.0% and 13.5%. Many investors quietly rebased their expectations, treating double-digit gains every six months as the norm (and their right!) rather than the exception.

But the next four half-years told a different story: -9.7%, 4.4%, -10.2% and 1.3%. The Nifty50 has moved from 25,810 to 22,620 in those two years.

This is not a market behaving badly. It is a market doing what it usually does: reverting to its long-term average after an extended run above it. You may not like it or want to believe it. But it is what is true.

And those who have had short investment horizons and little patience feel the pain most, because they were anchored to the good phase. Their expectations were the problem, not the markets, which are just mean-reverting.

The post Sept2022-24 vs Sept2024-26 Nifty Returns: Wrong Expectations Being Righted? appeared first on Stable Investor.

People treat that circular as if someone in the govt. just woke up and picked a number. That is not how it works. There is a process. It is just not as mechanical as a calculator.

A bit of historical context will help here. Till 2011, small savings rates were largely administered and revised once a year, if at all (see historical PPF interest rates). That created a problem. When market rates fell, money rushed into PPF, NSC and post office deposits because those rates had not moved. When market rates rose, collections dried up. The National Small Savings Fund, which funnels this money onwards, became a source of expensive, lumpy borrowing.

The Shyamala Gopinath Committee, set up to review NSSF, said the obvious thing: align small savings with market rates. In November–December 2011 the government accepted that idea. Rates would be benchmarked to G-secs of similar maturity, with a positive spread.

From February 2016, the review itself was made quarterly, and the new system took effect from April 2016.

The method is simple on paper. Take the average secondary-market yield, in the previous quarter, of government securities of a comparable maturity. Add a scheme-specific spread. That becomes the “formula” rate.

For most products, the spread is 25 basis points. PPF is usually mapped to the 10-year G-sec plus 25 bps. NSC and several time deposits use a similar 25 bps over the matching tenor. Sukanya gets 75 bps, and SCSS gets 100 bps, given the social purpose. So if the relevant 10-year yield in the previous quarter averaged 6.8%, the formula would point PPF towards something near 7.05%. That is the starting point. It is not the ending point.

The government has almost never followed the formula exactly. When yields were very low, notified rates stayed higher. When yields rose, PPF was often left untouched even as NSC or SCSS moved. Tax-free status of PPF and Sukanya, the size of the PPF corpus the govt. has now, the interest burden on the budget, inflation, and the need not to undercut bank deposits all sit on the table along with the G-sec number.

Banks have an interest here. Their FDs compete with these schemes. A fat spread on PPF makes their own products look dull. That lobbying is old and has never fully gone away.

Two more practical points.

First, a quarterly review does not mean a quarterly change. The ministry can, and often does, keep every rate unchanged. That has been the pattern for a long stretch now. PPF rates were last changed in April 2020. That is 6+ years as of now.

Second, the lock-in is not the same for every product. PPF and Sukanya earn the prevailing notified rate on the outstanding balance, so old money also moves when the rate changes. SCSS, NSC, KVP and post office time deposits lock the rate for that investment at the time you put the money in.

If you are waiting for PPF to jump because “10-year yields have risen,” you may wait a long time. The formula is a guide. The notification is a fiscal and policy decision that uses that guide. That is the system. Market-linked in design. Discretionary in practice. Reviewed every quarter. Changed only when the government decides the gap has become too large to ignore.

Where do the formula and the actual rates stand today?

Rates for October–December 2026 are unchanged again (details here). The G-sec numbers underneath have not stood still. Against a July–September five-year G-sec average of about 6.5%, the formula (plus 25 bps) points NSC towards 6.75%. The notified rate is still 7.7% — almost 1% extra. That is the widest gap right now. The five-year post office deposit at 7.5% is about 75 bps above the formula. SCSS at 8.2% is still ~70 bps above even after its 100 bps extra spread. MIS at 7.4% is about 65 bps rich.

PPF at 7.1% is the scheme the government is usually slowest to move – the whole balance reprices, and the interest is tax-free. Sukanya at 8.2% also sits well above its 75 bps spread. So the extra juice is not even.

The post How Indian Govt. sets Small Savings Interest Rates each Quarter? appeared first on Stable Investor.

• PPF interest rates – No Change (remains at 7.10%)
• Sukanya Samriddhi Yojana rates – No Change (remains at 8.20%)
• Senior Citizen Savings Scheme or SCSS – No Change (remains at 8.20%)
• National Savings Certificate or NSC – No Change (remains at 7.70%)
• Monthly Income Scheme or MIS – No Change (remains at 7.40%)

You can check the historical interest rates for a few of these using the following links – PPF Interest Rate History and Sukanya Samriddhi Yojana Interest Rate History

The EPF rates remain at 8.25%.

Note – Since the interest rates of RBI Floating Rate Savings Bonds 2020 (Taxable) are pegged to NSC rates, i.e. the RBI Floating Bond rates are always 0.35% above NSC rates. So, with NSC rates at 7.70%, the RBI Floating Rate Bond rates will also remain at 8.05% per annum for the period of Jul-Dec 2026. Read more about RBI Floating Rate Bonds interest rates Jul-Dec 2026.

The post PPF 7.1% | SCSS 8.2% | NSC 7.7% | Sukanya 8.2% | No Changes for Oct-Dec 2026 appeared first on Stable Investor.

But knowing is one thing, and doing is another. Take the ongoing fall in Indian markets (Sep-2026), when the Nifty has slid about 14% from its peak. Suppose you have Rs 50 lakh in equity funds, and it falls by about 14%. That is a notional loss of roughly Rs 7 lakh. You know all the right things. Yet the red numbers keep showing up on your phone, so you stop the SIP, and then redeem “just until things settle down”. The notional loss just became a permanent one.

Was the advice wrong? No. “Stay invested” is good advice. It just isn’t effective when your emotions get involved. Advice works only if it survives your emotions.

This is why I believe the real work in investing is not in picking funds, but in building the structure around them. An SIP that is automated, so that stopping it needs more effort than continuing it. An emergency fund, so you are never forced to sell equity to pay a bill. Money needed in the next few years kept out of equity altogether, so a market fall doesn’t touch your near-term goals.

And rebalancing rules that are written down in advance. Say your allocation was 70:30 in favour of equity at the peak, and after the fall it has drifted to 65:35. A rule that tells you to move it back, in phases, turns fear into a mechanical action. You end up buying equity at lower levels without having to feel brave about it. If you have fresh surplus, staggering it over a few months does the same job with more peace of mind.

None of this is glamorous. But this is what actually keeps people invested. Because if you want the UPs later, you will have to sit through the DOWNs now. Most investors accept that in theory, and very few accept it in a falling market.

Now the uncomfortable part.

Most of us believe we are the exception. The person who panics is always someone else. Honestly, it is hard to see your own behaviour clearly, especially in a bull market, when every decision looks smart because the account balance keeps going up. Very few investors ever check how their own decisions compare with simply staying put.

And that is where talking to a good financial planner helps. Not because you are incompetent, but because it is very difficult to be objective about your own money. A planner looks at your goals, your cash flows and your risk capacity, and then builds the plan and its rules with you when markets are calm. Someone who has nothing to sell you (which is the whole point of fee-only advice) and who can point back to what you had agreed on, when a falling portfolio is clouding your judgement.

Telling yourself the right thing is easy. Setting things up so that you can actually follow it is the hard part.

And the time to do that is before the next fall, not during it. If you are not sure how your own portfolio, or your own nerves, would hold up in the next one, that is a conversation worth having once. You know where to find me.

The post Knowing What To Do Is Not the Same as Doing It When Markets are Falling appeared first on Stable Investor.

But the new radical paper by the regulator does propose an overhaul which was long overdue. The response from those affected is obvious, and lobbying has already begun, from what little I understand.

But what is heartening is that IRDAI, for once, is acting like a customer-friendly regulator, not just a well-wisher of the insurance industry. I seriously hope IRDAI does not back off this time. If even half the proposals survive and become law, it will be a great achievement and a win for the consumers.

Here are a few thoughts on the proposal and this attempt to reform the sector.

• One of the biggest reasons many Indians didn’t buy insurance or stayed underinsured is not just that insurance is expensive. It isn’t cheap for many. But the bigger issue has been that a large part of the first-year premium (in some cases 60-70%) never went into the risk pool. It went to high 1st year commissions for agents and banks.
• This front-loaded structure made the business simple for the agent. Sell a new policy, collect a high first-year commission from the insurer, and then look for the next customer. Or sell yet another policy to an existing customer. IRDAI’s data shows that persistency is a real problem in India. At the 61st month (or 5 years), only half (48%) of life policies are still in force, which means more than half of policyholders quit within 5 years.
• Surrender value calculations were also a hard-to-understand black box. In effect, they helped pay for high agent commissions rather than being fair to the customer.
• The major culprit here in the mis-selling arena has been the banks. They already have the customer base and the trust, and they misused both to push unnecessary and unsuitable high-commission products. On some traditional products, banks earned as much as 70% of the first-year premium. The conflict of interest was obvious. The incentive to cheat the customer or to meet sales targets pushed down from the bosses was so high that, in many cases, customers (including those vulnerable ones like those aged 70+) were lied to in the face. I have long maintained that you should use banks only for simple banking services and nothing else. Never take financial advice from your bank.
• IRDAI proposes product-level commission caps that sit well below current market practice. The upper limits are lower for institutional distributors (Insurance Distribution Entities, or IDEs, such as banks and brokers) than for individual agents. Pure term insurance is also treated differently from savings-cum-insurance products. This is good, because the regulator is finally trying to stop the industry from pushing the wrong product on a trusting customer.
• One of the most interesting things in this reform is that if a policy is mis-sold, the name of the agent or bank RM can be put in the public domain. If implemented, this could be a game-changer for the consumer. Today, the RM or agent knows that not much will happen if they mis-sell a policy. Under the new proposal, the risk is a lasting negative record, and we all know how brutal the internet is. Once a seller is tagged as a mis-seller, their life and future employment can become difficult. The rules will need a fair process, with a way to appeal and records that expire, so that nobody is named wrongly. But done right, I think this is a far stronger deterrent to mis-selling than anything else in the proposal.
• One thing I feel strongly about: life insurance and health insurance are two very different things, and the proposal should treat them differently. Unlike life insurance, health insurance needs careful servicing and handholding when customers are in distress. A sharp cut in health commissions may improve the risk pool, but it also risks lowering the service levels that health cover depends on. This needs a relook.

The regulator IRDAI has finally shown guts and acted as a strong regulator must. My worry is not its intent, which is right. My worry is the lobby of banks, NBFCs and agents, which is well organised and will do everything to protect itself.

Policyholders have been mis-sold and cheated for far too long. I hope that, just this time, the regulator remembers that its first job is to protect the insurance customer. And I hope a major part of this proposal eventually gets implemented.

Reference:

1. Recalibrating Economics of Insurance Distribution Proposal – Part 1 and Part 2

The post IRDAI finally targets the Real problem in insurance – Commission (& Mis-Selling) appeared first on Stable Investor.

But that is not how it works in reality. Being good at making money does not automatically make you good at managing what you already have.

I write about this topic (in my monthly column in the Economic Times Wealth 21-Sep-2026 edition).

The post What Made You Rich Will Not Automatically Manage The Money – Economic Times Wealth (21-Sep-2026) appeared first on Stable Investor.

As overwhelming as this sounds, it is a classic sandwich generation squeeze. The phrase ‘Sandwich Generation’ is often used to describe a growing demographic group that needs to take care of both young children and elderly parents. Not just financially, but emotionally and psychologically too. And increasingly, this is becoming the default state for a large chunk of India’s middle-aged group.

Sadly, most advice on handling this life phase is either too vague or too guilt-driven (like family-comes-first). Here is one way to think about it. Not perfect, but one which tries to make this intense phase of life, a little less exhausting.

The post Living Through the Overwhelming ‘Sandwich Generation’ Squeeze – Economic Times Wealth (17-Aug-2026) appeared first on Stable Investor.

The underlying message is subtle but powerful, and something anyone would want to hear: You are special. You deserve more. And simple products are too ordinary for you now. These status games are the reason why otherwise sensible people begin to slip and start falling for products they didn’t need.

The post Having a Big Portfolio Puts a Bigger Target on your Back – Economic Times Wealth (27-Jul-2026) appeared first on Stable Investor.

The current or latest interest rate (2026) on RBI Floating Rate Bonds is 8.05% per annum. This is for the period between July and December 2026.

There is a fixed formula for the calculation of the RBI Floating Savings Rate Bond (FRSB) interest rate. The interest rate is linked/pegged with the prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 basis points or 0.35% over the respective NSC rate.

The current NSC rates have been set at 7.70% for the Jul-Sep 2026 quarter (details here). Adding the +35 basis points spread, we get 8.05%, which will be the interest rate on RBI Floating Rate Savings Bonds. So that is how the RBI Floating interest is calculated.

The interest rates of these bonds are reset every 6 months, and this is the reason why these are called floating-rate bonds. The interest rate floats. You don’t get a fixed interest for the entire duration of the bonds. You don’t lock in the bond rates until maturity. The bond rates will float and can change every 6 months depending on NSC interest rates change.

Read More – RBI on Floating Rate Savings Bonds FRSB 2020(T)

The interest on these bonds is paid half-yearly on 1^st January and 1^st July every year. There is no cumulative option in RBI floating rate bonds that pays out at the end of the tenure.

Is the RBI Floating rate bond tax-free?

No. The interest is fully taxable, and hence the name RBI Floating Rate Savings Bond (Taxable) 2020.

The tenure of RBI Floating Rate bonds is 7 years. So once the 7-year period is over, the bond money shall be paid back to the investor, on expiry of 7 years from the date of the original subscription.

While this is the first time interest rates have actually changed for these bonds, there have been quite a number of reset events in the past 2-3 years.

So if you are looking for the History of RBI Floating Rate Bond Interest Rates, then here it is:

• RBI Floating Rate Bond (January-June 2021) interest rate – 7.15%
• RBI Floating Rate Bond (July-December 2021) interest rate – 7.15%
• RBI Floating Rate Bond (January-June 2022) interest rate – 7.15%
• RBI Floating Rate Bond (July-December 2022) interest rate – 7.15%
• RBI Floating Rate Bond (January-June 2023) interest rate – 7.35%
• RBI Floating Rate Bond (July-December 2023) interest rate – 8.05%
• RBI Floating Rate Bond (January-June 2024) interest rate – 8.05%
• RBI Floating Rate Bond (July-December 2024) interest rate – 8.05%
• RBI Floating Rate Bond (January-June 2025) interest rate – 8.05%
• RBI Floating Rate Bond (July-December 2025) interest rate – 8.05%
• RBI Floating Rate Bond (January-June 2026) interest rate – 8.05%
• RBI Floating Rate Bond (July-December 2026) interest rate – 8.05%

In 2020, the Indian Government decided to issue the Floating Rate Savings Bonds (Taxable) 2020 or FRSB-2020, with effect from July 01, 2020, to enable resident Indians/HUF to invest in a taxable bond, without any monetary ceiling. These bonds were launched to replace the Government of India’s erstwhile 7.75% (taxable) bonds, which were commonly known as RBI 7.75% Bonds. The major difference between RBI Floating Rate Savings Bonds (2020) Vs RBI 7.75% taxable Savings Bonds (2018) was that the interest rate is floating and not fixed for the former, and it was fixed for the entire tenure for the erstwhile 7.75% RBI Bond.

If we compare RBI Floating Rate Bonds with SCSS and PMVVY, then here too the difference in changing interest rates. While even SCSS and PMVVY see periodic changes in interest rates, these are still locked in for the full tenure when you invest in them. But in the case of a floating rate bond, the interest rate applicable to you continues to change (float) and is not fixed for the entire tenure. So if rates go up, then it’s good for you. But if it goes down, then it’s not good for the bondholders.

While the minimum investment in these bonds is Rs 1000, there is no maximum limit on the investment you can make in RBI Floating Rate bonds.

Only resident Indians and HUFs can invest in these bonds. NRIs cannot invest in these bonds. But if you become an NRI after you have purchased the bond, then you can continue holding the bonds till maturity like residents/HUFs.

While the tenure of these bonds is pretty long, there is a facility for premature exit available only for senior citizens. Eligible old-age investors can encash the bond prematurely after the lock-in period of 4, 5, and 6 years in the age brackets of 80 years and above, between 70 to 80 years and 60 to 70 years, respectively.

So that was all about the latest interest rate of the RBI Floating Rate Bonds 2026 in India.

The post What is Interest Rate on RBI Floating Rate Bonds (July – December 2026)? appeared first on Stable Investor.