Investment In Govt. Schemes – Also subject to Market Risks

Citizens Beware — Investments in Govt. Schemes

There is a general perception among the public that investments made in Govt. sponsored schemes are highly safe and also believe that one gets what is committed. May be the security aspect remains still fine, but what is committed in terms of return on investment should not be taken for granted as there is no guarantee on the commitment.

Iam talking of the Nationasl Savings Certificate, taken through the post offices, wherein the govt. commits to doubling of the money invested in a period of 6 years. The exact money on maturity is also printed on the NSC.

However I have had a personal and bitter experience, just today, when I went to collect my NSC maturity amount, which had matured. I had invested Rs 24,000 6 years back and the money that I was committed to get, was printed in the NSC as well. I should have got Rs 48,000, whereas I was told that I would be getting only Rs 40,000. This I was given to understand is that the Govt. has reduced the interest rates. That is a straight drain of Rs 8000 over an investment of Rs 24,000.

Please beware. Even on Govt. Investments, any guarantee given by the govt, will only have to be taken with a pinch of salt.