Small savings are an attractive option for investors in lower tax brackets

Though debt mutual funds are currently offer yields to maturity that are marginally higher than small savings

The government has raised the interest rates on some small savings schemes For the second quarter in a row. The rates have been hiked between 20 and 110 basis points (bps), and are now ranging from 4.0 per cent to 7.6 per cent. The Reserve Bank of India (RBI) has raised the repo rate by 225 bps since May 2022, with the objective of containing inflation. Says Manavi Prabhu, head-fixed income, Anand Rathi Share & Stockbrokers: "The rates for small saving schemes are supposed to be market-linked, based on a predefined formula. According to the last monetary policy report released