the government has increased interest rates of several small savings schemes for third quarter of octoberdecember 2018 the government had linked rates of small savings schemes to yields of government papers of similar maturity in 2016 while announcing the quarterly settings of interest rates this hike is a result of the rise in interest rates of government bonds in the recent past for 15 year time depositsource etig databasebut is this increase enough no says the experts the repo rate has increased by 50 basis points in the last two revision cycles whereas the interest rates on small savings have increased only by 40 basis points says adhil shetty cofounder and ceo bankbazaarcom experts say that it is difficult to guess the next rate hike but its unlikely that the rates will come down in the coming quarters being an election year there wont be any reduction in coming quarters says melvin joseph founder finvin financial planners swapnil kendhe a registered investment adviser concurs with this view next hike is difficult to predict but since interest rates on schemes like ppf are going to move in line with the 10 year yield investors can remain invested in them he says though rate hikes were lower than expected it comes as a relief to fixed income investors as the rates have remained unchanged for the past two quarters after a reduction in januarymarch 2018 quarter after the hike interest rates of ppf senior citizen savings scheme scss and sukanya samriddhi yojana ssy have come at par with the rates offered by bank fixed deposits scss will earn 87 for senior citizens whereas tax free schemes of ppf and ssy will get returns of 8 and 85 respectively becoming an attractive option for long term investing experts advice that ppf should be a part of everyones investment portfolio ppf is risk free tax free and useful for meeting long term goals like retirement and childs education says mrin agarwal founder director finsafe and cofounder womantra however investors should note the restrictions on each of these schemes before making a decision only senior citizens or those who have retired early between 55 and 60 years of age can invest in scss it also comes with an investment cap of rs 15 lakh ssy account on the other hand can be opened only in the name of a girl child below 10 years of age and the maximum investment allowed is rs 15 lakh per annum other small savings products of time deposits and recurring deposits are taxable and therefore yield much smaller returns especially for those in the highest tax bracket if you want to invest in them you should do so only after 1 october to get higher returns the interest on these products is fixed at the time of investment so you will be able to book the higher revised rate