The rate of interest for several small savings schemes have been left unchanged for second quarter of financial year 2021-22, the Finance Ministry announced on June 30.
Instruments under the small savings category include Public Provident Fund (PPF), Senior Citizens Saving Scheme (SCSS), National Saving Certificate (NSC), Monthly Income Scheme (MIS) and others. They offer varying rates of interest ranging from 4 to 7.6 percent.
"The rate of interest on various Small Savings Schemes for the second quarter of financial year 2021-22 starting from 1st July, 2021 and ending on 30th September, 2021 shall remain unchanged from the current rates applicable for the first quarter," said the statement issued by Department of Economic Affairs under the Ministry of Finance.
The interest rates for the small savings instruments are notified quarterly by the Finance Ministry. For Q1 of FY22, the government had initially announced a reduction in interest rate. The rate cut was, however, immediately rolled back with the government calling it an "oversight".
Speculations were then rife that the Centre may slash the rates in Q2, by when the assembly polls in five states including the high-stake West Bengal would be over. However, the government has decided to keep the rates unchanged.
The nine small savings schemes, run by India Post or Department of Posts, are considered to carry the least risk among all investment options.
Here are the interest rate on various small savings schemes:
-Public Provident Fund (PPF): PPF fetches 7.1 percent which matures in 15 years. Partial withdrawal can be done after 5 years while they can also extend the account beyond 15 years by the investors. To keep the account active, a minimum deposit of Rs 500 per year is required.
-Senior Citizen Savings Scheme (SCSS): To earn regular interest income on a quarterly basis, investors who are 60 years old can deposit up to Rs 15 lakh in a Senior Citizen Savings Scheme. The senior citizens scheme offers an interest rate of 7.4 percent.
-Sukanya Samriddhi Yojana (SSY): It will continue to earn an interest rate of 7.6 percent. A maximum of 2 accounts is allowed for a household for two daughters individually.
-Post Office Time Deposits: You can also open time deposits at a post office for tenures of 1, 2, 3 or 5 years of tenure. It is similar to fixed deposits offered by banks. Post office term deposits of 1-3 years give an interest rate of 5.5 percent. The five-year term deposit gives 6.7 percent.
-Five-Year Post Office RD: This recurring deposit scheme offered by post offices will give new investors 5.8 percent interest rate.
-National Savings Certificate (NSC): This five-year scheme offers 6.8 percent compounded annually but payable at maturity.
-The Kisan Vikas Patra (KVP) will now mature or double in value in 124 months (10 years and 4 months), giving an interest rate of 6.9 percent.
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