The central government periodically updates the interest rates for popular small savings schemes, providing safe and reliable investment options for small and retail investors. These schemes include the Public Provident Fund (PPF), National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY), Senior Citizen Savings Scheme (SCSS), and Kisan Vikas Patra (KVP). Although the government has maintained the current interest rates since June, these schemes remain attractive due to their assured returns and non-market-linked nature. Let’s explore the features, benefits, and latest interest rates of these small savings schemes.
Public Provident Fund (PPF)
The PPF is a long-term, government-backed investment option that offers fixed returns along with tax benefits.
- Interest Rate:1% per annum.
- Tax Benefits: PPF falls under the EEE category, meaning deposits, interest earned, and maturity amounts are all tax-free. Deposits up to ₹1.5 lakh per year qualify for deductions under Section 80C of the Income Tax Act.
- Investment Term: 15 years, with the option to extend in blocks of 5 years after maturity.
National Savings Certificate (NSC)
NSC is a government-backed savings instrument offering fixed returns and tax benefits, available at any post office branch.
- Interest Rate:7% per annum.
- Investment Term: 5 years.
- Minimum Deposit: ₹1,000, with no maximum limit.
- Tax Benefits: Eligible for deductions under Section 80C.
Sukanya Samriddhi Yojana (SSY)
SSY is a scheme designed to secure the financial future of a girl child, offering attractive interest rates and tax benefits.
- Interest Rate:2% per annum.
- Deposit Limits: Minimum ₹250 and maximum ₹1.5 lakh per year.
- Account Term: Valid for 21 years from the date of opening, with deposits allowed for up to 15 years.
- Eligibility: Accounts can be opened for a girl child under 10 years old, with a maximum of two accounts per family.
Senior Citizen Savings Scheme (SCSS)
SCSS is a retirement-oriented savings scheme for senior citizens, providing regular income and tax benefits.
- Interest Rate:2% per annum.
- Maximum Deposit: ₹30 lakh.
- Tax Benefits: Deposits qualify for deductions under Section 80C of the Income Tax Act.
- Account Opening: Available at post offices and authorized banks.
Kisan Vikas Patra (KVP)
KVP is a savings certificate scheme aimed at encouraging small savings among investors, with guaranteed returns.
- Interest Rate:5% per annum, compounded annually.
- Maturity: 113 months.
These small savings schemes continue to be a reliable choice for investors seeking stable returns with minimal risk. Depending on your financial goals and needs, these options can help you grow your savings effectively while enjoying the security of government backing.