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A savings scheme with maturity of 15 years, PPF provides the benefit of compounding over a long period. It also offers EEE or ‘exempt, exempt, exempt’ advantage in terms of tax advantage, meaning subscribers get deduction benefit up to ₹1.5 lakh under Section 80C on deposits and tax-free interest and returns. PPF also allows the facility of partial withdrawal, loan and account extension beyond 15 years. Contributions can’t exceed ₹1.5 lakh in a financial year while deposits can be made in lump-sum or in 12 instalments.
Starting from 1 July, select small savings schemes will fetch 10 basis points lower interest rates for the September quarter. The government has reduced these rates, which are reviewed every quarter, to bring them in line with the falling interest rate across the financial system after the Reserve Bank of India (RBI) cut its benchmark policy rate thrice during the year. Check out the revised interest rates offered by small-savings schemes such as Public Provident Fund (PPF), National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) and much more are as follows:
A savings scheme, PPF will fetch an interest rate of 7.9%, revised from 8% earlier. The amount is compounded annually and paid on maturity.
A five-year small savings scheme, NSC will fetch an interest rate of 7.9%, revised from 8% earlier. The amount is compounded annually and paid on maturity.
Kisan Vikas Patra (KVP) will fetch interest rate of 7.6% (compounded annually) with maturity of 113 months. Or, in other others, investments will double in 113 months as compared to 112 months earlier.
Sukanya Samriddhi Account and Senior Citizen Savings Scheme will continue to fetch higher rates than other schemes. The girl child savings scheme Sukanya Samriddhi Account will fetch 8.4% (compounded annually), from 8.5% earlier.
The Senior Citizen Savings Scheme is a popular small savings scheme meant for providing regular, risk-free income to senior citizens (age 60 or more). The interest payout is on a quarterly basis. The five-year Senior Citizens Savings Scheme will now fetch a lower rate of interest at 8.6%, from 8.7% earlier.
Post office term deposits of 1-3 years will fetch interest rate of 6.9% while the five-year has been pegged at 7.7%. Post office 5-year recurring deposits will fetch 7.2% (quarterly compounding), from existing rate of 7.3%.
The five-year Post Office Monthly Income Scheme (MIS), where interest is paid out monthly, will fetch 7.6% as compared to 7.7% earlier.
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